Cairn Energy sues Air India for $ 1.2 billion arbitration award

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Written by Ewan Rocha and Jonathan Stempel

MUMBAI / NEW YORK (Reuters) – India’s leading aviation company, Kern Energy, has sued to impose a $ 1.2 billion arbitration award it won in a tariff dispute against Indians, according to a U.S. District Court document seen by Reuters.

The move increases pressure on the Indian government to pay a total of $ 1.2 billion in addition to the benefits and costs the British company Cairn received in court of arbitration in December.

The court ruled that India had breached an investment treaty with the United Kingdom and stated that the New Delhi government is legally responsible for the payment.

Kern filed the lawsuit Friday in the Southern District Court in New York, seeking to put Air India responsible for the trial that the British company won. The argument for the lawsuit is that the airline, as a state company, is “legally indistinguishable from the state itself.”

“The nominal distinction between India and Air India is illusory and serves only to help India unduly protect its assets from creditors such as Kern,” the document said.

Air India did not immediately respond to requests for comment.

(Reported by Aditi Shah and Aftab Ahmed in New Delhi)