A PCA tribunal dismissed India’s jurisdictional objections and found it in breach of the FET standard in the India–UK BIT in an arbitration under UNCITRAL rules initiated by Cairn Energy.
The company has appointed a leading international law firm to advise the company of its legal options, and in particular, the Australian Bilateral Investment Treaty.
India is believed to have challenged in a court in The Hague an arbitration tribunal verdict that overturned its demand for ₹10,247 crore in back taxes from Cairn Energy Plc — the second time in three months that it has refused to accept an international award against retrospective tax.
India has time till mid-April to file an appeal against an international arbitration tribunal ordering it to repay UK’s Cairn Energy Plc USD 1.2 billion-plus interest and cost, but the challenge can only be on limited grounds such as procedure not being followed.
India will be filing an appeal at The Hague this week against the $1.4-billion arbitration award against British oil firm Cairn Energy.
Cairn said its shareholders expect the use of the company’s ’strong powers of enforcement’ to recover 1.4 billion.
Panthera said it has been “consistently frustrated over an extended period” by the government of Rajasthan, which has rejected Panthera’s application for a prospecting licence for the gold project.
The move signals the government’s resolve to defend its sovereign rights in taxation. The government has kept open possibility of settling the dispute within existing Indian laws.
Cairn Energy has filed a case in a US district court to enforce a $1.2 billion arbitration award it won in a tax dispute against India, a court document showed, ratcheting up pressure on the government to pay its dues.
For a government struggling to find revenue to boost a COVID-19 battered economy, options of appeal against the arbitration award are limited and it may not have the financial bandwidth for such a payout.
UK-based Cairn Energy Plc has threatened that it may be forced to begin attaching Indian assets including bank accounts in different world capitals, unless the government resolves the issue.
Investors have written to the Indian government as well as the governments of the US and UK seeking adherence to the award of a tribunal at the Permanent Court of Arbitration in The Hague
The petition, filed by three investment firms related to Devas, argues that the award can be enforced in the US because India is a signatory to the New York Convention.
Solicitor General Tushar Mehta has advised the government that the decision of an arbitration tribunal cannot contradict the law passed by a sovereign parliament.
The scope of consent to arbitration is an important issue that needs to be finally settled - not least because it could have multi-billion dollar implications for India in respect of other cases involving challenges to India’s taxation measures by foreign investors.
The Indian government plans to contest the judgement on the Vodafone arbitration award in Hague.
Cairn is seeking full restitution for losses resulting from the expropriation of its investments in India in 2014.
India will try and keep its taxation laws out of the ambit of all Bilateral Investment Treaties (BITs) and comprehensive economic pacts that it negotiates.
In the sorry saga of the Vodafone tax dispute, how did we get here? The original error lies with India’s tax laws.
Vodafone Group Plc’s big win against the Indian government could set a precedent for similar arbitration cases, including the one initiated by Cairn Energy Plc.