Air India has time till mid-July to challenge the lawsuit filed by Cairn Energy PLC demanding that a US federal court force the airline to pay a $1.26-billion arbitration award it had won against the Indian government in December last year, sources said.

Air India is controlled by the Indian government so much that they are “alter egos”, Cairn had said in the lawsuit filed with the US district court. The court should hold the airline company liable for the arbitration award, the company had said.