Denying that the government of India has purportedly asked state-owned banks to withdraw funds from foreign currency accounts abroad in anticipation of the potential seizure of such accounts with regard to the legal dispute with Cairn Energy Plc, the Finance Ministry on Sunday said India is defending its case “vigorously” and that it had never agreed to arbitrate a “national tax dispute”.
The Finance Ministry also said that it is open for an amicable solution to the dispute within the country’s legal framework.
“The Government of India is vigorously defending its case in this legal dispute. It is a fact that the Government has filed an application on March 22, 2021 to set aside the highly flawed December 2020 international arbitral award in The Hague Court of Appeal,” it said.
It added that Cairn’s CEO and its representatives have approached the government for discussions to resolve the matter.
“Constructive discussions have been held and the Government remains open for an amicable solution to the dispute within the country’s legal framework,” the statement added. While the government appointed a judge on the three-member arbitration panel and fully participated in the proceedings against India seeking Rs 10,247 crore in back taxes from Cairn, the Ministry said the tribunal “improperly exercised jurisdiction over a national tax dispute that the Republic of India never offered and/or agreed to arbitrate.”
In a statement, the Finance Ministry called the 2006 reorganisation of Cairn’s India business for listing on the local bourses as “abusive tax avoidance scheme.”