February 18, 2021 3:08:55 am
Cairn Energy’s chief executive officer Simon Thomson will meet Finance Secretary Ajay Bhushan Pandey on Thursday to discuss the future course for a $1.2 billion arbitration award, which it won against the Indian government’s retrospective tax demand. This comes after Cairn moved court in the US for the implementation of the arbitration award.
“Cairn’s CEO has sought a meeting with the Finance Minister. Now he will be having a meeting with the Finance Secretary and other senior officials of the ministry,” an official said.
In December, Cairn Energy won a major relief as Permanent Court of Arbitration at The Hague had ruled that the Indian government’s retrospective tax demand against the global oil and gas major was “inconsistent” with the UK-India bilateral treaty. The international tribunal had ruled that India’s retrospective tax demand was “in breach of the guarantee of fair and equitable treatment”.
In a petition, Cairn Energy Plc and its UK holding company have approached the US district court for the District of Columbia to recognise and confirm the December 21 award by a three-member tribunal at the Permanent Court of Arbitration at The Hague. Last month, the firm had written to the government, saying it would be forced to seize government assets if the latter failed to pay the tax amount. The judgment has asked the government to pay $1.2 billion (roughly Rs 8,800 crore) to Cairn Energy Plc.
Cairn Energy, in 2011, sold Cairn India to Vedanta Group, barring a stake of 9.8 per cent. It wanted to sell residual stake as well but was barred by the I-T department. The government froze the payment of dividends by Cairn India to Cairn Energy. The principal tax demand for Cairn is around Rs 10,247 crore, besides a penalty at 100 per cent on the principal tax.
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