cairn: US court halts suit, allowing Cairn to settle row with India – Times of India
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NEW DELHI: A New York court has paused Cairn Energy’s pursuit of US assets of Air India for the recovery of a $1.2-billion arbitral award, so as to allow the British firm to reach a settlement with the Indian government on the longdrawn dispute.
The New York district court delayed the tax suit to November 18, according to court documents. This follows Cairn Energy and Air India jointly asking the court to stay further proceedings in view of the government enacting a fresh law to scrap retrospective taxation in the country.
The new law will result in withdrawal of the Rs 10,247-crore tax demand that the government had sought from Cairn. Sources with direct knowledge of the matter said the finance ministry is framing rules that will lead to withdrawal of the retrospective tax demand on Cairn and 16 other companies, including Vodafone Group of UK.
These rules require the companies to withdraw all litigations against the government in return for being refunded any money that was collected to force the retrospective tax demand.
A format for the undertaking that the companies will have to furnish committing to withdraw litigations is under finalisation and should be released in coming days, they said. Companies will have to use that format to give an undertaking, after which the money will be refunded.
In all, the government has to return about Rs 8,100 crore, of which Rs 7,900 crore is due only to Cairn.
Cairn has indicated that the refund, without interest and penalty, was acceptable to it — opening an avenue to settle the seven-year-old dispute with Indian authorities
The New York district court delayed the tax suit to November 18, according to court documents. This follows Cairn Energy and Air India jointly asking the court to stay further proceedings in view of the government enacting a fresh law to scrap retrospective taxation in the country.
The new law will result in withdrawal of the Rs 10,247-crore tax demand that the government had sought from Cairn. Sources with direct knowledge of the matter said the finance ministry is framing rules that will lead to withdrawal of the retrospective tax demand on Cairn and 16 other companies, including Vodafone Group of UK.
These rules require the companies to withdraw all litigations against the government in return for being refunded any money that was collected to force the retrospective tax demand.
A format for the undertaking that the companies will have to furnish committing to withdraw litigations is under finalisation and should be released in coming days, they said. Companies will have to use that format to give an undertaking, after which the money will be refunded.
In all, the government has to return about Rs 8,100 crore, of which Rs 7,900 crore is due only to Cairn.
Cairn has indicated that the refund, without interest and penalty, was acceptable to it — opening an avenue to settle the seven-year-old dispute with Indian authorities
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