Cairn team to visit India next week to convince government against appeal in tax case – Times of India
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The team is seeking to meet finance minister Nirmala Sitharaman and other top government functionaries. The visit comes days after UK secretary of state for international trade Liz Truss’ trip.
The company, which exited India a few years ago, is seeking to make a distinction with the Vodafone case, arguing that the tax demand is not related to money flowing out but on account of pre-IPO restructuring.
Junior minister for finance Anurag Thakur told Parliament that the government has filed an appeal in the Vodafone case, raising expectations of a similar action in the Cairn dispute too. The government has time until the third week of March to file an appeal.
Cairn believes that the award is binding on both parties and the company’s board has written to Prime Minister Narendra Modi and key ministers to argue that its shareholders expect the government to meet its legal obligations.
Sources said, even the British government and some prominent shareholders, who are global investors, have conveyed the position.
“The money disputed, and now adjudicated, in the arbitration ultimately belongs to the shareholders, so the ramifications of the award and India’s honouring of it go well beyond Cairn itself and run across the international investment community more widely… Cairn’s Board of Directors will continue to take all necessary steps to protect the rights of our global shareholders under international law as the (investment protection) treaty affords strong provisions to enforce a successful award,” said a source.
On its part, the government believes that the award of a tribunal cannot override the sovereign powers of the state to legislate on tax matters.
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