Scottish oil firm Cairn Energy which gave India its biggest onshore oil discovery said an international arbitral tribunal is expected to give a favourable decree by the end of summer over its tax dispute where it has challenged the Indian government for seeking Rs 10,247 crore in retrospective taxes from the oil explorer.
In a statement made by Cairn energy it highlighted that tribunal has indicated that while it has encountered some difficulties created by the Covid-19 pandemic, it does not expect significant delays and hopes to remain reasonably within the lead-time it had anticipated.
In January 2014, Cairn received notice from the Indian Income Tax Department (IITD) requesting information relating to the Group reorganisation in 2006. The IITD attached the 10% shareholding in Cairn India Limited, then valued at approximately US$1 billion. Cairn received a draft assessment order from the IITD in March 2015 and subsequently filed a Notice of Dispute under the UK-India Bilateral Investment Treaty in order to protect its legal position and shareholder interests.
Cairn commenced international arbitration proceedings against India in 2015 following the retrospective taxation actions undertaken by the IITD in 2014. The Hague and final hearings on the matter were completed in December 2018. The three-member tribunal was supposed to give an award by February 2019. But in March 2019, it delayed it to 2019-end and then to the summer of 2020.
Cairn stated while tribunal is not yet able to commit to a specific date for its ruling, it expects a "release of the Award after the end of the summer,"Summer in Europe is between June-August, so the company expects an order next month or early September.