"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.
The senior government official noted New Delhi has filed an appeal against the arbitration award, and added "the government is confident that the award will be set aside".
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.