THE government has filed an appeal against the $1.4billion international arbitration award, which includes interest, won by British oil and gas exploration company Cairn Energy in a retrospective tax demand lawsuit. This was after two days of discussions with the finance secretary by the company led to no resolution.
According to government sources, the centre will also consider challenging previous suits filed in several courts globally by Cairn Energy. Although the government has accepted a move by the company to reach a resolution, it is of the opinion that any disagreement solution to be chased by Cairn will have to be inside prevailing laws in India.
Recently, the CEO of Cairn Energy, Simon Thomson, met Finance Secretary Ajay Bhushan Pandey to discuss the way forward with respect to the $1.4 billion (Rs 10,300 crore) arbitration award given by the Permanent Court of Arbitration at The Hague in December 2020. The Court had pronounced that the Indian government’s retrospective tax claim on Cairn Energy was in violation of the assurance of fair and impartial treatment and in contradiction of the India-UK agreement.
While the CEO of Cairn said before the meeting that shareholders of the company want a rapid resolution, the government said that the only thinkable solution for both parties to escape more litigation was for Cairn to agree to the government’s Vivad se Vishwas tax amnesty and dispute resolution system.
This story is from the March 15, 2021 edition of India Legal.
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This story is from the March 15, 2021 edition of India Legal.
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