Final hearing in Cairn Energy Plc.’s challenge to a Rs10,247 crore retrospective tax demand raised by India will begin in August in The Hague, the British firm said on Monday.
The three-member international arbitration tribunal “has stated that it will make appropriate arrangements to progress with the drafting of the award as expeditiously as possible after the final hearing,” the company said in its preliminary results announcement.
Cairn had initiated an international arbitration after Indian government in 2014 used a two-year old law to raise a Rs10,247 crore demand on a decade old internal reorganisation of the company’s unit in the country. The 2012 law gave the government powers to impose taxes retrospectively.
“International arbitration proceedings are well advanced with the final hearing of Cairn’s claim under the UK-India Bilateral Investment Treaty scheduled for August 2018 in The Hague,” the company said. Following the draft assessment order of January 2014, the tax department attached the company’s residual 9.8% shares in its erstwhile subsidiary, Cairn India, and confiscated $104.7 million dividend it was due to receive. Read More…