India in talks with Dutch lawyers to file an appeal against Cairn verdict

India is in talks with senior Dutch lawyers to file an appeal against the Cairn verdict at The Hague in the coming weeks. The Rs 8,800-crore award will likely be contested on two key grounds — jurisdiction and international public policy.

India is expected to take a stand that the government has the sovereign right of taxation and private individuals cannot decide on that.

According to the Centre, it falls outside the domain of a bilateral investment treaty and beyond the jurisdiction of international arbitration.

Also, the government will most likely invoke international public policy, arguing that Cairn did not pay tax in any jurisdiction across the globe. Finance ministry officials affirmed that an appeal will be filed in the coming weeks. The Centre has time up to March 22 to appeal against the verdict.

The government had lost an international arbitration case to energy giant Cairn Plc under the retrospective tax legislation amendment in a verdict on December 21.

“A decision to file an appeal will be taken shortly. Consultations are on with senior counsels to firm the grounds of appeal,” said a government official.

Cairn had got an order from a Dutch lower court on implementation of the award, which will enable the UK firm to identify commercial Indian assets that can be seized, such as aircraft and ships, among others.

“It is not going to be easy to get sovereign assets seized. Media reports around India offering assets or oilfields to the oil major to prevent seizures of foreign assets for implementation of the award are absolutely baseless,” said another official.

The case pertains to the Rs 24,500-crore tax demand on capital gains made by the oil major in reorganising its India business in 2006-07.

The Rs 8,800-crore arbitration award includes legal fees paid by Cairn for the case.