Cairn Energy, UK wins $1.2 billion arbitration award against the Government of India

December 30, 2020by Admin0

British Oil and Gas explorer Cairn Energy Plc has won an arbitration award of USD1.2 billion, plus interest and costs against the Government of India on a tax dispute. The dispute arose as a result of a change in Indian Tax law in 2012, enabling the government to retrospectively tax companies for mergers and acquisitions going as far back as 1962. In order to recover the dues from Cairns, Indian tax authorities  had seized dividend and shares, and withheld tax refunds.

Related Services: Arbitration, Tax Advisory Services, India Desk Legal Services

Cairn initiated arbitration under the terms of UK-India Bilateral Investment Treaty,. The company sought $1.4 billion in damages from the Government of India to recoup the value of the Group’s residual shareholding in Cairn India Limited (CIL, since merged with Vedanta Limited).

Proceedings were done under UNCITRAL Rules, administrated by the Permanent Court of Arbitration (PCA), and the seat of arbitration was at Netherlands. The Arbitral Tribunal ruled that India’s tax claim was not valid and asked the government to repay the funds, along with interest, to Cairn. The Arbitral Tribunal declared that India’s retrospective tax demand breached the U.K.-India bilateral investment protection treaty. 

In a Similar case, Vodafone had previously won an award against India, to the tune of USD 3 billion.

To read more kindly visit

https://www.bloomberg.com/news/articles/2020-12-23/cairn-energy-wins-arbitration-in-tax-dispute-with-india

https://pca-cpa.org/en/cases/221/

About ATB Legal

ATB Legal is a full-service legal consultancy in the UAE providing services in dispute resolution (DIFC Courts, ADGM Courts, mainland litigation management and Arbitrations), corporate and commercial matters, IP, business set up and UAE taxation. We also have a personal law department providing advice on marriage, divorce and wills & estate planning for expats. Please feel free to reach out to us at office@atblegal.com for a non-obligatory initial consultation.

Leave a Reply

Your email address will not be published. Required fields are marked *

5 × two =