The International arbitration tribunal has asked India to pay Rs 8,000 crore as damages to Cairn, UK oil major.This is the second setback for Indian government related to retrospective taxation after it lost the arbitration case against Vodafone three months ago.
According to the reports, an international arbitration tribunal ruled that India’s tax claim was not a valid demand. New Delhi can appeal against the ruling which serves a double-blow to Prime Minister Narendra Modi’s government after a similar loss against Vodafone.
The winning of the international arbitration case has ended one of the most high-profile disputes in India, Reuters reported, citing sources that India has lost the case. Meanwhile, Cairn has not come out with any official statement on the matter yet.
The tribunal, which had completed main court hearings in December 2018, was earlier supposed to give an award by February 2019, which later was delated to March 2019, then 2019-end and then to 2020. The international arbitration tribunal has reportedly concluded that the Cairn tax issue does not amount to "tax dispute" but a "tax-related investment" dispute, which is why it falls under its jurisdiction. It said India's tax demand from Cairn is not valid and amounts to a breach of fair treatment under the bilateral investment protection pact.
