Cairn asks India to pay $5.6 billion in Tax Case
The Dollar Business Bureau
Oil energy explorer Cairn has asked India to pay about $6 billion by as compensation for affecting its business through a tax dispute.
Scotland-based Cairn said the company is seeking taxes related to transactions carried out to identify the company's structure for Cairn India’s stock market flotation in 2007.
Last year, India had asked Cairn to pay $1.6 billion for the 2007 listing of the company’s India operation. Cairn had taken the case to the international arbitration court in The Hague.
Cairn had sold its Cairn India’s majority stake to Vedanta Resources in 2011. It said the tax department's investigation had postponed the sale of its outstanding holding in its Indian venture. The investigation, which began in 2011, was worth about $700 million.
Cairn said it will seek "restitution of losses" resulting from that delay.
India has moved to renegotiate several of these treaties with other countries. It now wants to protect itself from these foreign litigations. The company is exploring all the Indian legal avenues before turning to international arbitration.
Investment treaties set the rules to handle business disputes.
India has had a series of lawsuits over issues such as cancelled licenses and retroactive taxation.
Vodafone also has a case pending with the International Court of Justice for Arbitration (ICJA) over a $2.5- billion bill.