In a tax dispute, Cairn Energy has the legal authority to take Indian assets!
As part of a long-running tax dispute, UK oil major Cairn Energy has been granted the authority to take Indian national resources in France worth more than €20 million (£17 million).
As Cairn raises stress on the Indian government over contested tax charges, a French panel has imposed the freezing of roughly 20 homes in downtown Paris.
Cairn stated that it desired an “amicable settlement” in the $1.2 billion (£870 million) dispute.
So when the Indian government receives notification from the French court, officials said that would seek “legal remedies.”
Cairn Energy, an Edinburgh-based oil and gas exploration company, is disputing an Indian government tax demand from 2014 when the country’s tax authority seized a 10% stake in Indian operations that Cairn was attempting to sell.
Cairn brought the case to an international tribunal, which granted the company $1.7 billion in fees and compensation in December 2020. An appeal has been lodged by the Indian government.
Despite the lack of a settlement, the energy business has begun identifying properties it may seize, including those associated with Air India.
“It is a long-running story, unfortunately, and one we wish hadn’t actually taken place,” David Nisbet, head of group corporate relations at Cairn Energy, said in a BBC interview.
“Clearly, we want to find an agreed amicable with the government of India,” he said. He also stated that this is all part of a process of telling India that they’ll have to ‘engage seriously,’ but that they also have a fiduciary duty to defend our shareholders’ interests.
He claimed as although meetings in Delhi on two occasions more than six months after the international tribunal’s verdict, India has yet to say if it will follow it. The Indian government has stated that international tribunal awards are not recognized and that taxation is a sovereign concern.
Mr. Nisbet claims that Cairn Energy has never questioned a government’s ability to levy taxes.
Although, he did state that the Indian government had actively participated in the five-year international tribunal process and had contributed to the UK-India investment treaty.
Cairn believes the Indian government would uphold the verdict as well as the pact.
Source: BBC News