New Delhi: stupa energy and Air India jointly asked a federal court in New York to halt further proceedings in the British firm’s US lawsuit targeting the airline to enforce a $1.2 billion arbitral award.
According to court documents reviewed by PTI, the move comes after the government enacted a law to do away with retrospective taxation in the country, which would result in withdrawal of tax demand of Rs 10,247 crore on Cairn.
The British company had won an international arbitration award against levying such a tax and sought to take possession of Air India’s assets after the government refused to honor the award and gave it over $1.2 billion in interest and interest. paid the fine.
But, last month, the government enacted the Taxation Laws (Amendment) Act, 2021, which quashes all such retrospective tax demands and agreed to refund the Rs 7,900 crore seized from Cairn for implementing such demand. has gone.
Cairn has indicated that the refund was acceptable to it without interest and penalty – opening the way for the seven-year-old dispute to be settled.
Cairn and Air India make joint request to US District Judge paul gardefe said on September 13 that the suspension of the proceedings would give them “extra time to evaluate the effects and implications” of the law repealing the retrospective tax.
In return for Rs 7,900 crore, Cairn will drop court-ordered lawsuits threatening to confiscate Indian government assets abroad.
One of those suits was filed in May against state-owned Air India Ltd, which Cairn has said should be considered as an alter ego of the Indian government.
“Implementation rules are in the process of making rules and it will take some time,” both said in the petition.
They requested the court to “stay further proceedings in the matter until October 31, 2021, and to reschedule the preliminary pre-trial conference and, respectively, to the new dates for the parties to their joint pretrial letter and the proposed Deadline for submission of case management plan should be fixed. November 2021.”
“The parties have agreed and agreed that the adjournment will facilitate efficient resolution of the dispute, conserve the resources of the Court and the parties, and is not intended to hinder or delay,” he said.
Cairn filed a suit in the District Court of New York on May 14, holding Air India liable as the alter ego of the Republic of India for the government’s obligations under a foreign arbitral award. The firm filed a separate petition before the District Court for the District of Columbia to recognize and enforce the arbitration award against India on February 12, 2021.
Seeking to repair India’s damaged reputation as an investment destination, the government last month enacted new legislation to reduce Rs 1.1 lakh crore in outstanding claims against multinationals such as the telecom conglomerate. vodafone, pharmaceuticals company Sanofi and brewer SABMiller, now owned by AB InBev and Cairn.
Around Rs 8,100 crore collected from companies under the repealed tax provision is to be refunded if the firms agree to drop the outstanding litigation including interest and penalty claims. Of this, Rs 7,900 crore is due only to Cairn.
In December, an international arbitration tribunal reversed the Rs 10,247 crore tax on Cairn’s restructuring of its Indian business before its listing in 2006. It also asked the Indian government to refund the forfeited and sold shares, forfeited dividends and tax refunds. This totaled more than $1.2 billion in interest and penalties.
The government initially refused to honor the award, forcing Cairn to recognize $70 billion worth of Indian assets in Singapore from the US, including taking flag carrier Air India Ltd to a US court in May. In July a French court paved the way for Cairn to confiscate immovable property belonging to the Indian government in Paris.
All these litigation will be dropped once Rs 7,900 crore is paid, Cairn CEO Simon Thomson told PTI earlier this month.
According to court documents reviewed by PTI, the move comes after the government enacted a law to do away with retrospective taxation in the country, which would result in withdrawal of tax demand of Rs 10,247 crore on Cairn.
The British company had won an international arbitration award against levying such a tax and sought to take possession of Air India’s assets after the government refused to honor the award and gave it over $1.2 billion in interest and interest. paid the fine.
But, last month, the government enacted the Taxation Laws (Amendment) Act, 2021, which quashes all such retrospective tax demands and agreed to refund the Rs 7,900 crore seized from Cairn for implementing such demand. has gone.
Cairn has indicated that the refund was acceptable to it without interest and penalty – opening the way for the seven-year-old dispute to be settled.
Cairn and Air India make joint request to US District Judge paul gardefe said on September 13 that the suspension of the proceedings would give them “extra time to evaluate the effects and implications” of the law repealing the retrospective tax.
In return for Rs 7,900 crore, Cairn will drop court-ordered lawsuits threatening to confiscate Indian government assets abroad.
One of those suits was filed in May against state-owned Air India Ltd, which Cairn has said should be considered as an alter ego of the Indian government.
“Implementation rules are in the process of making rules and it will take some time,” both said in the petition.
They requested the court to “stay further proceedings in the matter until October 31, 2021, and to reschedule the preliminary pre-trial conference and, respectively, to the new dates for the parties to their joint pretrial letter and the proposed Deadline for submission of case management plan should be fixed. November 2021.”
“The parties have agreed and agreed that the adjournment will facilitate efficient resolution of the dispute, conserve the resources of the Court and the parties, and is not intended to hinder or delay,” he said.
Cairn filed a suit in the District Court of New York on May 14, holding Air India liable as the alter ego of the Republic of India for the government’s obligations under a foreign arbitral award. The firm filed a separate petition before the District Court for the District of Columbia to recognize and enforce the arbitration award against India on February 12, 2021.
Seeking to repair India’s damaged reputation as an investment destination, the government last month enacted new legislation to reduce Rs 1.1 lakh crore in outstanding claims against multinationals such as the telecom conglomerate. vodafone, pharmaceuticals company Sanofi and brewer SABMiller, now owned by AB InBev and Cairn.
Around Rs 8,100 crore collected from companies under the repealed tax provision is to be refunded if the firms agree to drop the outstanding litigation including interest and penalty claims. Of this, Rs 7,900 crore is due only to Cairn.
In December, an international arbitration tribunal reversed the Rs 10,247 crore tax on Cairn’s restructuring of its Indian business before its listing in 2006. It also asked the Indian government to refund the forfeited and sold shares, forfeited dividends and tax refunds. This totaled more than $1.2 billion in interest and penalties.
The government initially refused to honor the award, forcing Cairn to recognize $70 billion worth of Indian assets in Singapore from the US, including taking flag carrier Air India Ltd to a US court in May. In July a French court paved the way for Cairn to confiscate immovable property belonging to the Indian government in Paris.
All these litigation will be dropped once Rs 7,900 crore is paid, Cairn CEO Simon Thomson told PTI earlier this month.
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