Cairn Energy says a French court has accepted its petition for a freeze on some Indian government properties in Paris as part of its attempts to recover a $1.2 billion arbitration award it won last year.
Reports suggest that a French court has ordered the freeze on 20 centrally located properties of the Indian government, worth more than $24 million, as part of a guarantee of the amount owed to Cairn.
Cairn is unlikely to evict the officials living in those properties but the government cannot sell them after the court order.
The government said today it has "not received any such order from any French court" and will take legal remedies to protect the interests of India.
"Government is trying to ascertain the facts, and whenever such an order is received, appropriate legal remedies will be taken, in consultation with its Counsels, to protect the interests of India," the Finance Ministry said in a statement.
Cairn said it would take "all necessary legal actions" to protect the interests of its shareholders.
"Our strong preference remains an agreed, amicable settlement with the government of India to draw this matter to a close, and to that end we have submitted a detailed series of proposals to them since February this year. However, in the absence of such a settlement, Cairn Energy must take all necessary legal actions to protect the interests of its international shareholders," said its statement.
The dispute dates back to 2012 after the Manmohan Singh government decided to impose capital gains tax retrospectively on some companies. An arbitration tribunal last December scrapped the levy of taxes to Cairn retrospectively.
Cairn, which has oil and gas operations in India, was awarded damages by the Permanent Court of Arbitration at The Hague. The three-member tribunal, which included a judge appointed by India, ordered the government to refund shares sold, dividend confiscated and tax refunds withheld.
India has not accepted the decision and has filed a petition in a court in the Netherlands - the seat of the arbitration.
The government said it would vigorously defend its case in The Hague court.
"The government has already filed an application on March 22 to set aside the December 2020 international arbitral award in The Hague Court of Appeal. Government of India will vigorously defend its case in Set Aside proceedings at The Hague," the Finance Ministry said.
The ministry also said the CEO and the representatives of Cairns had approached the government for discussions to resolve the matter. "Constructive discussions have been held and the Government remains open for an amicable solution to the dispute within the country's legal framework," it said.
By seizing Indian assets in various countries, Cairn is attempting to force the government to pay damages that amount to $ 1.72 billion including interest and penalty.
Cairn says it has identified $ 70 billion of Indian assets overseas.
Last month, Cairn filed a petition asking a court in New York to consider the flag carrier Air India as "the alter ego of India" and therefore responsible for the government's debts.
Air India has time till mid-July to file a plea contesting the Cairn lawsuit, sources said.
Cairn said it has registered similar claims against India in courts in the US, Britain, the Netherlands, Singapore and Quebec.