The Indian government doesn’t expect Air India’s privatisation to be derailed by a billion-dollar lawsuit just filed in the US against the flag carrier.
The suit by Cairn Energy wants to enforce a $1.2-billion arbitration award it won against the Indian government in a long-standing tax dispute.
Cairn argues it can sue the airline as a state run business and potentially seize its assets.
"Air India has no connection with Cairn Energy. Air India has not entered into or violated any contract with Cairn Energy. The airline’s disinvestment process will not be impacted by the legal proceedings," a finance ministry official said.
"As and when Air India becomes a private airline, then Cairn’s case will fall through automatically."
In December, the Permanent Court of Arbitration at The Hague ruled that the Indian government is liable to pay damages worth $1.2 billion to UK based Cairn in the tax dispute.
Since then the company has been seeking Indian state owned firms with operations overseas it is able to sue and seize assets.
This is where Air India comes in.
According to an Indian legal expert, Cairn ‘has the right to go after an asset of the government of India.’
