Some of the best views of the Eiffel Tower can be found in Paris’s 16th arrondissement. If UK-listed Cairn Energy gets its way, India’s government officials will lose sight lines to that landmark. Keen to claim a $1.7bn arbitration award handed down by a Dutch court in December, Cairn has, with help from French courts, seized India’s residential properties there.

Nations have every right to control their natural resources. But India’s tax attack on Cairn has always looked like seller’s remorse triggered by the group’s success with a concession in Rajasthan.

Given the huge prize at stake, even a compromise would make a big difference to the beleaguered oil explorer. Its shares trade below its book value of just £817m ($1.1bn).

The tax dispute has simmered since Cairn sold its last stake in Indian subsidiary Cairn India to local miner Vedanta in 2014. The award has given the explorer an impetus to continue its legal battle.

Some $70bn of Indian assets are dotted around the world for Cairn to choose from. Cairn retains the same lawyers as Elliott, a US hedge fund that once seized an Argentine navy vessel in a debt dispute. The explorer has already taken aim at Air India’s aircraft. That is awkward for India, which hopes to privatise and list the airline.

India says that if Cairn claims its $1.7bn, it will end up avoiding tax everywhere. The explorer cites a 1995 bilateral India-UK tax investment treaty which required arbitration for disputes.

India terminated all such foreign agreements back in 2017. That was suspiciously retroactive. Even so, a 15-year sunset clause makes the India-UK treaty valid for any deals done before termination.

The government likes a scrap, having battled with Vodafone on a separate €3bn ($3.6bn) tax case for years. Its pugnacity has failed to stymie foreign direct investment, which climbed to more than $76bn in the year to March — up nearly a fifth on the previous period.

Expect the two sides to forge a face-saving compromise. Otherwise à vendre signs might start popping up throughout the City of Lights.

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