Cairn Energy Case: A British company was having a dispute with India over tax payment. In which the decision has come in favor of the company and it has acquired the right to confiscate the property of the government.
Prime Minister of India Narendra Modi and President of France Emmanuel Macron (PM Narendra Modi-Emanuel Macron)
Cairn Case Against India: A French tribunal has ordered the freezing of at least 20 Indian properties located in central Paris. In fact, Britain’s oil and gas company Cairn Energy is having a tax dispute with India. In this case, he acquired the right to confiscate the assets of the Government of India of more than 20 million euros (about Rs 166 crores) present in France. The company says it also wants a resolution to the $1.2 billion dispute.
This whole controversy started when Cairn Energy objected to a decision of the Government of India regarding tax payment. Cairn had a ten percent stake in a company operating in India (Cairn Energy Case in Hindi). The company was trying to sell this stake, but the Income Tax Department of the Government of India confiscated it. Against this decision of India, the company appealed to the International Tribunal. The tribunal, in its decision in December 2020, ordered India to pay $ 1.7 billion in damages to the company.
India appealed against the decision
After this the Government of India also appealed against the decision. Although Cairn Energy did not sit on its hands, it started identifying the assets of the Government of India in other countries (Cairn Energy Case Explained). So that if the government does not pay damages, then the property can be confiscated. At the same time, the decision of the International Tribunal also means that if the government does not pay the damages, then the company will have the right to confiscate its assets in more than 160 countries. Apart from France, Cairn has also registered this decision of the tribunal in the US, UK, Canada, Singapore, Mauritius and the Netherlands. That is, here too she can confiscate the property.
What did the Indian government say?
In this entire dispute, the Finance Ministry of India has said that it has not received any notice or order from the court of France. The ministry issued a statement saying that it is ascertaining the facts of the government (Cairn Case Against Indian Government). If any such order is received, lawyers will be consulted and appropriate legal measures will be taken to protect the interests of India. At the same time, India has already filed an application in the International Court of Appeal in the month of March. The ministry has acknowledged that Cairn has approached the government to discuss resolving the dispute and discussions have taken place.
When did the controversy start?
This dispute started in January 2014. When the company was preparing to sell its stake, only then the Income Tax Department of India asked for a tax investigation from the past years. The company was told that it could not sell its 10 per cent stake. The department itself sold most of the 10 per cent share. After which the company appealed to the International Tribunal under the UK-India Bilateral Investment Treaty in 2015. After five years, the decision came in favor of the company.
Appeal made in 2015
Following these events of 2014, Cairn initiated action under the UK-India Bilateral Investment Treaty in 2015. The company said that the events of 2014 had a major detrimental effect on the company and its international shareholders. The dispute was believed to have forced Cairn not only to sell its assets but also to postpone major investments and drastically reduce its workforce.
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