Cairn and Vodafone pursue talks to settle Indian tax claims internationaltaxreview.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from internationaltaxreview.com Daily Mail and Mail on Sunday newspapers.
: Thursday, May 20, 2021, 2:30 AM IST
FPJ Edit: India is now no better off in its tax battle with Cairn Energy PLC; in fact, it may be manifestly worse off
After more than a decade in courts around the world, and millions of dollars spent in legal fees, India is now no better off in its tax battle with UK energy firm Cairn Energy PLC. In fact, it may be manifestly worse off. Cairn has moved a US court to seize the assets of the government of India-owned Air India, to enforce collection of the $1.2 billion award it won in the Permanent Court of Arbitration in The Hague in December 2020. India has filed an appeal against that order at the Dutch Court of Appeals, and the same is expected to be listed for hearing only in September this year.
High stakes, higher risks
Cairn has offered to invest the entire financial award in India, providing that the government relents on the appeal it filed in March. This would include the principal amount of $1.2 billion, plus interest of $500 million.
Although this is a significant sum, Indian government officials have made it clear that the government will not accept this offer. But the government is open to a settlement on different terms.
“There is no way that the government is going to accept the proposal. We have filed an appeal. Any solution will be within the legal framework,” one government official told the press.
India decides to fight Cairn arbitration decision internationaltaxreview.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from internationaltaxreview.com Daily Mail and Mail on Sunday newspapers.
$1.4 bn Cairn arbitration award: FM Sitharaman says its her duty to appeal
Last year, the government lost two high-profile arbitrations over the levy of taxes on British firms, using legislation that gave it the power to levy taxes with retrospective effect.
Finance Minister Nirmala Sitharaman
PTI
Finance Minister Nirmala Sitharaman on Friday indicated the government s intent to appeal against an arbitration panel asking India to return USD 1.4 billion to UK s Cairn Energy Plc, saying it is her duty to appeal in cases where the nation s sovereign authority to tax is questioned.
Last year, the government lost two high-profile arbitrations over the levy of taxes on British firms, using legislation that gave it the power to levy taxes with retrospective effect.