In its half-yearly earnings statement, the company said it expects an international arbitral tribunal to shortly give a decree on its challenge to the Indian government seeking Rs 10,247 crore in retrospective taxes.
“The main evidentiary hearing of Cairn’s claim under the (UK-India Bilateral Investment) Treaty took place in August 2018 in The Hague with a final hearing in December 2018. All formal hearings and submissions have now been made and the tribunal is in the process of drafting its award,” it said.
The tribunal, it said, has indicated that “it expects to be in a position to issue the award after the end of the summer of 2020, with no significant delay expected as a result of COVID-19.”
Cairn said it is seeking “full restitution for losses of over $1.4 bn resulting from the expropriation of its investments in India in 2014; continued attempts to enforce retrospective tax measures; and the failure to treat the company and its investments fairly and equitably.”
This is the second most high-profile retrospective tax litigation. Last week, a global arbitration tribunal ruled that India’s efforts to claim Rs 22,100 cr in past taxes from Vodafone Group were in breach of fair treatment under the bilateral investment protection pact between the S Asian nation and the Netherlands. Cairn got a I-T notice in January 2014, raising a preliminary assessment of Rs 10,247 cr tax liability relating to the group reorganisation done in 2006.