Cairn Energy has sued India's flagship carrier Air India to enforce a $1.2 billion arbitration award that it won in a tax dispute against India, according to a US District Court filing.
The move ratchets up pressure on India's government to pay the sum of $1.2 billion plus interest and costs that the British firm Cairn was awarded by an arbitration tribunal in December.
The body ruled India breached an investment treaty with Britain and said New Delhi was liable to pay.
Cairn filed the lawsuit recently in the US District Court for the Southern District of New York, seeking to make Air India liable for the judgment that was awarded to Cairn.
The lawsuit argued that the carrier as a state-owned company, is "legally indistinct from the state itself".
"The nominal distinction between India and Air India is illusory and serves only to aid India in improperly shielding its assets from creditors like (Cairn)," the filing said.