Cairn setback as India to appeal $1.2bn tax ruling
Cairn sold its stake in Cairn India
India has appealed against a ruling by an international tribunal ordering it to pay $1.2bn in damages to Cairn Energy in a long-running tax dispute.
Edinburgh-based Cairn said it has received notice that the Government of India has petitioned the Dutch Court of Appeal to set aside the arbitration award on 21 December in favour of the company.
The ruling, granted unanimously, ordered the Indian government to compensate Cairn for breaching its obligations to the company under the UK-India Bilateral Investment Treaty.
Cairn announced last month that it was taking further legal action to force the Indian government to pay up. It said today it “has full confidence in its position”. As previously advised, it said it will continue to take all steps necessary in order to protect the interests of its shareholders.
The company was awarded the compensation, plus interest and costs, taking the current total to more than $1.7bn. The Indian government had said previously it would challenge the order.
Cairn took the case to arbitration in 2015 to fight against a demand in 2014 from Indian authorities for $1.4bn in taxes it said were owed on capital gains related to the 2007 listing of its local unit.
In 2011, Cairn sold its majority stake in Cairn India to Indian miner Vedanta, reducing its stake in the Indian company to about 10%.
The government seized the remaining shares in 2014 after the tax complaint was made, as well as dividends Vedanta owed to Cairn Energy for its holdings in the Indian firm.Advertising
India last September lost another international arbitration case against Vodafone over a $2bn retrospective tax dispute.