New Delhi: The government, which is facing interest payments of over $1.2 billion after going against an arbitration award, said on Monday that it has not received any formal offer from the UK. cairn energy PLC to resolve the issue within the legal framework of the country.
The three-member international arbitration tribunal, comprising a judge appointed by India, had in December last year unanimously reversed the levy of taxes. stupa Retrospectively and ordered refund of the shares sold, dividend forfeited and tax refund withheld for recovery of such demand.
Since then, Cairn has been pressuring India to make payments while the government is exploring possible solutions within the existing framework.
In a written reply to a question in the Lok Sabha, Minister of State for Finance Pankaj Choudhary said that the arbitral tribunal, which had its seat in The Hague, ruled in favor of Cairn on December 31, 2020.
“It has asked India to pay Cairn over $1.2328 billion in interest and $22.38 million in prize money for arbitration and legal costs,” he said.
With New Delhi refusing to pay and instead challenging the award before a court in the Netherlands, Cairn has registered the order in several jurisdictions and started recovering money by confiscation of Indian assets abroad.
“A French court has passed an order to confiscate certain properties of the Indian government in Paris,” he said. “It has been communicated through diplomatic channels.”
Asked whether Cairn has offered any kind of amicable solution to the dispute, Chowdhury said, “No formal proposal has been received for resolution within the legal framework of the country.”
He did not elaborate.
In the initial months after the award, the government wanted the dispute to be settled under the ‘Vivad se Vishwas’ scheme.
Now closed scheme provided for settlement of tax dispute if the taxpayer pays 50 per cent of the tax demanded in return for closure of the case along with waiver of penalty and interest.
For Cairn, this would have meant achieving about a third of the $1.2 billion claim. This is because the original tax demand that the government had sought from it was Rs 10,247 crore – half of which would be Rs 5,123.5 crore.
The government had recovered around Rs 7,600 crore by selling Cairn shares, forfeiting its dividend and withholding tax refunds. Overall, the amount due to be paid to Cairn would be less than Rs 2,477 crore or $400 million.
Presently, no tax dispute resolution scheme is in operation.
Cairn has identified $70 billion of Indian assets abroad for possible confiscation to take the prize, which now totals $1.72 billion, including interest and fines.
In June, Cairn filed a suit in the US District Court for the Southern District of New York, holding that Air India is so controlled by the Indian government that they are ‘alter egos’ and liable to arbitration awards to the airline. should be held.
Similar lawsuits are likely to be brought in other countries, mainly those with high value assets.
The three-member international arbitration tribunal, comprising a judge appointed by India, had in December last year unanimously reversed the levy of taxes. stupa Retrospectively and ordered refund of the shares sold, dividend forfeited and tax refund withheld for recovery of such demand.
Since then, Cairn has been pressuring India to make payments while the government is exploring possible solutions within the existing framework.
In a written reply to a question in the Lok Sabha, Minister of State for Finance Pankaj Choudhary said that the arbitral tribunal, which had its seat in The Hague, ruled in favor of Cairn on December 31, 2020.
“It has asked India to pay Cairn over $1.2328 billion in interest and $22.38 million in prize money for arbitration and legal costs,” he said.
With New Delhi refusing to pay and instead challenging the award before a court in the Netherlands, Cairn has registered the order in several jurisdictions and started recovering money by confiscation of Indian assets abroad.
“A French court has passed an order to confiscate certain properties of the Indian government in Paris,” he said. “It has been communicated through diplomatic channels.”
Asked whether Cairn has offered any kind of amicable solution to the dispute, Chowdhury said, “No formal proposal has been received for resolution within the legal framework of the country.”
He did not elaborate.
In the initial months after the award, the government wanted the dispute to be settled under the ‘Vivad se Vishwas’ scheme.
Now closed scheme provided for settlement of tax dispute if the taxpayer pays 50 per cent of the tax demanded in return for closure of the case along with waiver of penalty and interest.
For Cairn, this would have meant achieving about a third of the $1.2 billion claim. This is because the original tax demand that the government had sought from it was Rs 10,247 crore – half of which would be Rs 5,123.5 crore.
The government had recovered around Rs 7,600 crore by selling Cairn shares, forfeiting its dividend and withholding tax refunds. Overall, the amount due to be paid to Cairn would be less than Rs 2,477 crore or $400 million.
Presently, no tax dispute resolution scheme is in operation.
Cairn has identified $70 billion of Indian assets abroad for possible confiscation to take the prize, which now totals $1.72 billion, including interest and fines.
In June, Cairn filed a suit in the US District Court for the Southern District of New York, holding that Air India is so controlled by the Indian government that they are ‘alter egos’ and liable to arbitration awards to the airline. should be held.
Similar lawsuits are likely to be brought in other countries, mainly those with high value assets.
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