Companies

Cairn expects arbitration award in retro tax case by this summer

PTI New Delhi | Updated on March 10, 2020 Published on March 10, 2020

British oil explorer Cairn Energy Plc expects an international arbitral tribunal to give a decree by the summer of 2020 on its challenge to the Indian government seeking ₹10,247 crore in retrospective taxes.

The three-member tribunal, which had in December 2018 completed main court hearings in the British company’s challenge to the Indian government using a retrospective legislation to seek ₹10,247 crore in taxes, was supposed to give an award by February 2019, but in March 2019, it delayed it to 2019-end and then to the summer of 2020.

“All formal hearings and submissions have now been made and the tribunal is in the process of drafting its award. The tribunal has indicated that it expects to be in a position to issue the award in the summer of 2020,” Cairn said in its half-yearly earnings announcement on Tuesday.

No reason was given by the tribunal for the delay in the award.

Seeking restitution

Cairn said it is seeking full restitution for losses totalling more than $1.4 billion resulting from government expropriation of its investments in India in 2014.

The company, which gave the country its biggest oil discovery, received a notice from the income tax department in January 2014, requesting information related to the group reorganisation done in 2006.

Alongside, the department attached the company’s near 10 per cent shareholding in its erstwhile subsidiary, Cairn India. In March 2015, the tax department sought ₹10,247 crore in taxes on alleged capital gains made by the company in the internal reorganisation.

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Published on March 10, 2020
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