Tripping up on arbitration

Cairn Energy has wrong-footed the government

Last week, the government of India’s twin ambitions of driving economic growth through foreign direct investment and bridging the fiscal deficit via disinvestment came up against hard reality checks when Cairn Energy moved a US court to seize the assets of state-owned but privatisation-bound Air India to recover dues of $1.2 billion that New Delhi owes it after losing a tax arbitration award by the Permanent Court of Arbitration in The Hague in December last year. The government had filed an appeal in the Dutch court of appeals in March. Apart from the spectacle of a country with superpower aspirations