Cairn Energy Tax Dispute: The arbitration tribunal has ruled in favor of Cairn in the tax case from the last date, after which it has to recover from the Government of India.
Cairn Energy Plc
In order to recover its dues from the Indian Government, Britain’s Cairn Energy Plc is now eyeing the properties of other public sector companies and banks from the US to Singapore after Air India. . The arbitration tribunal has ruled in favor of Cairn in the tax case from the last date, after which it has to recover from the Government of India. A company lawyer said Cairn would file lawsuits in several countries to make public sector companies liable to pay interest and penalties along with $1.2 billion owed to the Indian government.
A company lawyer said Cairn would file lawsuits in several countries to make public sector companies liable to pay interest and penalties along with $1.2 billion owed to the Indian government.
Cairn Energy drags Air India to court
Last month, Cairn filed a lawsuit in the US District Court for the Southern District of New York. Cairn had said that Air India is controlled by the Government of India. In such a situation, the liability of payment under the arbitration becomes on the airline. Dennis Hernitzky, Head of Sovereign Litigation Practice, Quinn Emmanuel Urquhart & Sullivan, the law firm representing the company, said, “There are several PSUs on which we are considering promoter action.” Enforcement action will happen soon and it may not happen in the US.
what is the matter
In December last year, a three-member international tribunal unanimously rejected the Indian government’s retrospective tax demand on Cairn. The tribunal also included a judge appointed by India. The tribunal had directed the government to refund the shares sold by it, forfeited dividend and tax refund.
Despite being involved in the arbitration process for four years, the Indian government did not accept the decision and challenged it in the court of the Netherlands, the seat of the tribunal. Following pressure from its shareholders, Cairn is trying to recover the amount by confiscation of public sector companies and bank accounts abroad.
Hernitzki said, the arbitral decision will be registered in many countries or will be validated soon. Cairn will intensify enforcement actions in countries around the world to drive value to its international shareholders. However, Cairn’s lawyer did not specify which companies in India would be targeted or in which countries.
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