UK oil company Cairn Energy plc said Sunday that its shareholders, including the world’s leading financial institutions, are expecting to use the company Strong Enforcement Powers “To Reclaim $ 1.4 billion from Indian Government Failing to Keep Its Word to Honor International Arbitral Awards in Tribunal for Retrospective Taxes

Cairn has already moved courts in the US, UK, The Netherlands, Canada, France, Singapore, Japan, the United Arab Emirates and the Cayman Islands for the award of the international arbitration tribunal on March 21 Register and Recognize December – the first step before applying for the seizure of Government of India assets such as bank accounts and payments to the state Corporations, planes and ships in these jurisdictions in the event that New Delhi fails to return the value of the seized and sold shares, the dividend is confiscated and the tax refund is stopped to meet a retrospective tax claim of 10247 billion To adjust GBP

Cairn CEO Simon Thomson, who met senior Treasury officials for three days last month on the matter, said the Indian government should keep its word on arbitration recognition and return the $ 1.4 billion amount that an international arbitration tribunal ordered to overturn a retrospective tax claim

“Our shareholders are watching,” he said in a Twitter post, “They expect India to honor its commitments and get this matter to a close quickly If India doesn’t, and India is delaying, our shareholders expect us to exercise our strong enforcement powers that we must do”

Finance Minister Nirmala Sitharaman announced on 5 March announced the government’s intention to appeal the award when it said it was its “duty” to appeal cases where the country’s sovereign tax authority is challenged

Interestingly, in the award of Jan. Dec. 12 made it clear that the basis of the ruling was not a challenge to the 2012 law that gave the government the power to tax business retrospectively or the sovereign tax law of India

“So it’s not about domestic tax law Rather, it is a question of whether the tax measures taken by the state, which are valid under its own tax laws or not, violate international law, ”the tribunal had said

After losing a Supreme Court case against the capital gains tax levied on Hutchison’s 2007 sale of its India business to Vodafone for $ 11 billion, the government enacted laws in 2012 that gave it the Authorized to tax such transactions retrospectively afterwards, the tax department said Vodafone should have withheld tax on the transaction and issued a notice on Jan.218 crore were requested, which later resulted in penalties of 7900 crore was increased

In January 2014, the department assessed that Cairn had also made an alleged capital gain from restructuring its India business prior to going public in 2006/07, and filed for tax of 10247 billion GBP Unlike Vodafone, where no enforcement action was taken, the Cairns Company seized and sold remaining stake in the Indian entity, seized dividends on that stake and stopped tax refunds on that stake

Cairn alleged that its restructuring was in accordance with the law of the time and was approved by the government and regulators, including Sebi, and challenged the tax claim in an international arbitration tribunal which overturned the claim and ordered a return of $ 1.4 billion

“The award has now been finalized and it is time for the Government of India to recognize this award as they have said several times over the years that they would,” Thomson said Graduate, fulfill your obligations and honor the award ”

And nothing less than that what Cairn shareholders want “This is what our shareholders do expect these global financial institutions; This is what they need, “he said,” I believe if India does this it will reaffirm these shareholders that India can be a positive investment destination “

Vodafone also won an arbitration award last year against the retro tax that the government challenged in a court in Singapore – the seat of the arbitration court

In the Cairn case, the seat of the arbitration tribunal was The Hague, and any challenge must be brought there

Sources said the award is final and the merits cannot be challenged, and under Dutch law the grounds for setting aside an award are extremely narrow. that exceeds his mandate, an unsigned or unfounded arbitration award and the order that violates public order or morality

The Cairn Prize was unanimously approved by all three judges, including one appointed by the Government of India. The 582-page decision contained extensive justifications on the very point of the challenge raised by the Government of India, including the point that taxation should not Part of the bilateral investment agreement was

Cairn had contested the tax claim under the U.-India Bilateral Investment Agreement, which contains strict provisions to enforce a successful arbitral award and the decision of the tribunal, is final and binding on both parties

“We have clarified our position on retrospective taxation We have repeated it in 2014, 2015, 2016, 2017, 2019, 2020 until now I do not see any lack of clarity,” said Ms. Sitharaman, referring to that Modi government’s stance not to make a new tax claim using the 2012 legislation

“Where can I find an award that challenges India’s sovereign tax authority? If there is a question about sovereign right to tax, I will appeal, it is my duty to appeal,” she said Questions the government’s tax authority, I’ll address it ”

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Honor, the Honor

World News – UK – Cairn wants India to keep its word by paying $ 1 to 4 billion shareholders to seek enforcement

Source: https://www.thehindu.com/business/cairn-wants-india-to-honour-its-word-and-pay-14-billion-shareholders-to-seek-enforcement/article34010927.ece