Cairn Energy and India govt Taxation actions details
Cairn announced an update on its proceedings against India under the UK-India Bilateral Investment Treaty (the “Treaty”) in March 2019
Cairn commenced proceedings against India in 2015 following retrospective taxation actions undertaken by the Indian Income Tax Department (“IITD”) in 2014. Final merits hearings for the arbitration concluded during 2018. Cairn’s claim under the Treaty is for monetary compensation of ~US$1.4 billion, the sum required to reinstate the Company to the position it would have been in, but for the actions of the IITD since January 2014. The arbitration panel is expected to issue a binding and internationally enforceable award, and Cairn continues to have a high level of confidence in the merits of its claims in the arbitration.
Now that the merits submissions and hearings have concluded, the arbitration Panel is preparing its final award with respect to Cairn’s claim under the Treaty. The Panel had originally guided the arbitration parties that is expected to issue an award expeditiously following the conclusion of the main merits hearings in The Hague held in August 2018.
When the parties appeared before the Tribunal in December 2018, the Panel advised that it had not been able to advance the award as expected due to the number of procedural matters that had been brought before it since the August hearings and that it is was not in a position at that time to give guidance to the parties on the expected timing of the issuance of the award.
Cairn subsequently wrote to the Panel in February 2019 asking if it was then able to provide any guidance on timing, and the Panel has now responded that although it remains mindful of Cairn’s need for a swift decision, given its workload and the number of matters before it, it is still unable to provide specific guidance on timing. As a result of this, Cairn expects that the timetable for issuing the award will be more protracted than originally anticipated and is unlikely to be before late 2019.
The Panel has said it will keep the parties updated regarding its progress.
In October 2019 Cairn updates that-
The Arbitral Tribunal has indicated that whilst it is not yet able to commit to a specific award release date, it expects to be in a position to issue the Award in the summer of 2020. In compliance with direction from the Tribunal, the relevant text is reproduced in full below.*
Cairn continues to have a high level of confidence in the merits of its claims in the arbitration and is seeking full restitution for losses of more than US$1.4 billion.
* “The Arbitral Tribunal has indicated that it expects to be in a position to issue the Award in the summer of 2020, but has clarified that to avoid any misunderstanding, the Tribunal did not intend firmly to commit to a specific Award-release date, nor is it yet in a position to do so.”
In July 2020 Cairn another update that-
Cairn is announcing an update on its proceedings against the Government of India under the UK-India Bilateral Investment Treaty.
The Arbitral Tribunal has indicated that, whilst it has encountered some difficulties created by the Covid-19 pandemic, it does not expect significant delays and hopes to remain reasonably within the lead-time it had anticipated. Whilst it is not yet able to commit to a specific date for its ruling, it expects a “release of the Award after the end of the summer.”
Cairn continues to have a high level of confidence in the arbitration and is seeking full restitution for losses of more than US$1.4 billion.
In March 2021-
Cairn confirms that it has received notice that the Government of India has petitioned the Dutch Court of Appeal to set aside the arbitration award dated 21st December 2020 issued pursuant to the UK-India Bilateral Investment Treaty which was granted unanimously in favour of Cairn.
Cairn has full confidence in its position. As previously advised, Cairn will continue to take all steps necessary in order to protect the interests of its shareholders.
Waiting for more updates-
Source: Cairn
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