Air India dragged into Cairn’s dispute with India’s Taxman

Written by: Adith Charlie

(Adith Charlie, May 17) UK’s Cairn Energy has filed a lawsuit aimed at seizing Air India’s assets and enforcing the $1.72 billion international arbitration it won against the Indian government in a longstanding tax dispute. The US lawsuit argued that the divestment-bound carrier, as a state-owned company, is “legally indistinct from the state (India) itself.” The dispute dates back to 2015 when the Taxman sent a notice to Cairn Energy regarding a retrospective tax demand, which was deemed by an arbitration court in The Hague as being “in breach of the guarantee of fair and equitable treatment”, and against the India-UK bilateral treaty.  Indian tax authorities have legally challenged the ruling. Air India presently flies wide-bodied aircraft to New York, Newark, San Francisco, Chicago and Washington DC in the US, and has several sales offices there.

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