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| Delhi HC dismisses Cairn petition |
| Press Trust of India / New Delhi Aug 07, 2009, 19:54 IST |
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The Delhi High Court has dismissed a Cairn India petition seeking to restrain the government from recovering the development cost the company had deducted from the profit it made from selling crude of the Raava oil field.
Cairn had deducted $55 million development cost ONGC had incurred on the field from the profit it made from selling crude. The cost was incurred before the field was sold to Command Petroleum of Australia which was later transferred to Cairn Energy of UK.
Cairn Energy India has challenged the government's move to recover $450-500 million along with the interest by imposing Post Tax Rate of Return (PTRR) on the crude sold to state-run Hindustan Petroleum and Bongaigaon Refinery.
The government had asked the two firms to deduct the amount from the price of oil they pay to the Cairn-led consortium.
Cairn had earlier approached a Malaysian court but failed to get a stay on an arbitration order that had upheld the government position.
Dismissing Cairn's petition, Justice S N Dhingra observed that it had not disputed the quantum of amount and the company itself had appealed against the arbitration award before the Malaysian court.
The court slammed Cairn saying it cannot take refuge under the Indian Arbitration Act after failing to get relief in a foreign country, which they have opted for arbitration.
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