Cairn initiates arbitration against $520 mn govt demand over discrepancies

A source said based on the PSC, the seat of arbitration is likely to be London, while both the parties can have the option of deciding the seat later

Cairn Oil & Gas, a vertical of Anil Agarwal-controlled Vedanta Limited, has initiated arbitration against the government after it served a demand notice of $520 million on the company for alleged discrepancies in cost recovery in Rajasthan fields.

The Directorate General of Hydrocarbons (DGH) had sought the amount in additional profit petroleum after an audit found discrepancies in the way capital expenses made on setting up the infrastructure to produce oil were booked. “Following the government’s demand, the company has initiated arbitration against the move,” said a senior government official.

Cairn refused to comment on the issue. The arbitration notice was initiated