Cairn Energy Agrees to Drop Cases Against India in Exchange for $1 Billion
19:38 GMT 07.09.2021 (Updated: 15:15 GMT 28.05.2023)
In December 2020, India lost an arbitration case at an international tribunal in a retrospective tax matter to Cairn Energy.
On Tuesday, British multi-national firm Cairn Energy Plc said it would drop litigation to seize Indian properties in a refund of USD 1 billion, Indian news agency PTI reported.
The company’s CEO, Simon Thomson, said that the cases would be dropped in “a couple of days” after receiving the cash.
“Everything will be dropped...There will be no more litigation, that will be it...,” he said. “It will clear the matter up.”
The matters involving
$2.74 billion in taxes that the Indian government imposed on the company in 2015 over Cairn’s reorganisation in 2006 resulted in the creation of Cairn India Ltd. The tax was imposed retroactively as the then federally ruling Congress government amended the law in 2012, allowing Indian officials to demand taxes for deals struck before the law was approved in parliament if the underlying assets in a transaction between two foreign entities were in India.
An international court in December 2020 had ruled that the Indian government had violated the “guarantee of fair and equitable treatment”.
As a result, Cairn Energy petitioned for seizing any Indian government asset such as properties in foreign countries ranging from France to the US, bank accounts, payments to state-owned entities, airplanes and ships, to recover the amount.