A French court froze 20 residential properties worth over 20 million euros ($24 million) belonging to the Indian government in Paris while upholding a petition filed by Cairn Energy seeking to force the Narendra Modi government to fork out a $1.7-billion international arbitration award.

The order issued by the Tribunal Judiciaire de Paris is deeply embarrassing for the Modi government, which has refused to pay the sum after losing a tax dispute with Cairn Energy that dates back to 2014.

Cairn said the order was a necessary first step to take ownership of the properties and ensure that the proceeds from any sale would go to the Edinburgh-based oil producer.

The company has already filed similar lawsuits in the US, the UK, Canada, Singapore, Mauritius and the Netherlands in an attempt to grab the Indian government assets and realise its arbitration dues. France is the first country where it has been successful in pressing its claims.

The Modi government continued to prevaricate by sending out confusing signals on what it intended to do in response to the latest adverse court verdict. It said it would wait for a copy of the French court’s order and then decide how best to pursue legal remedies while keeping the door “open for an amicable solution to the dispute within the country’s legal framework”.

“Constructive discussions have been held and the government remains open for an amicable solution to the dispute within the country’s legal framework,” the finance ministry said in a statement after reports of Cairn Energy’s latest victory in the protracted legal dispute came in.

In December last year, the arbitration tribunal in The Hague had awarded $1.2 billion plus costs and interest totalling roughly $1.73 billion.

The arbitration tribunal had also overturned the Indian government’s demand for Rs 10,247 crore in back taxes that was issued in 2014 and was related to the Cairn group’s reorganisation of its Indian operations in 2006.

Cairn India sold a 58.5 per cent stake in its Indian operations to Anil Agarwal’s Vedanta group in December 2011 for $8.67 billion while retaining a 10 per cent rump stake. The government subsequently attached Cairn Energy’s residual stake in the business while vigorously pursuing the tax dispute, which it eventually lost.

Back in March, the government challenged the international arbitration award before the court of appeals in The Hague.

The French court order enhances the bargaining position of Cairn Energy which has been trying to work out a settlement with the Indian government.

In an email response to a question from The Telegraph, a spokesman for Cairn Energy said: “Our strong preference remains an agreed, amicable settlement with the Government of India to draw this matter to a close, and to that end we have submitted a detailed series of proposals to them since February this year. However, in the absence of such a settlement, Cairn Energy must take all necessary legal actions to protect the interests of its international shareholders.”

Cairn Energy has offered to forgo the interest and cost, totalling over $500 million, and invest that sum in any oil and gas or renewable energy project identified by Indian government if the principal dues of $1.2 billion are paid.