Why Cairn Energy's move to attach Air India's assets in $1.2 billion tax case has the Centre in a fix
India TodayThe recent move by UK’s Cairn Energy Plc--threatening to seize the assets of national carrier Air India to enforce a $1.2 billion arbitration award the former had won against the Indian government last year--has proved to be extremely embarrassing for the Centre. Cairn Energy has moved the US district court for the Southern District of New York, seeking to make Air India liable as the airline is “legally indistinct from the state itself”. In January 2013, the Supreme Court ruled in favour of Vodafone Plc in a case where the Indian government had raised a $2 billion tax claim with the British telecom company related to its acquisition of Hutchison's assets in India in 2007 through a web of intermediate companies. The Centre will have to face the ignominy of the Vodafone case too, where, in September last year, the Permanent Court of Arbitration at the Hague ruled that India’s retrospective tax demand on Vodafone was “in breach of the guarantee of fair and equitable treatment”.