Simon Thomson, CEO of Cairn Energy, sought swift enforcement of the over-$1.2 billion arbitration award, during his meeting with top finance ministry officials in New Delhi on Thursday.
India is preparing to file an appeal against the award at The Hague. “We had a constructive dialogue and the dialogue is ongoing… I can’t comment more on the meeting,” he said, after meeting Finance Secretary Ajay Bhushan Pandey, CBDT Chairman P C Mody, and other tax officials.
The energy major has been building pressure on India to honor the arbitration award and has filed a case in the US, the UK, and The Netherlands over implementation of the December 21 award.
Meanwhile, New Delhi has time till March 21 to file an appeal in accordance with a 90-day window. Thomson had, however, sought a meeting with Finance Minister Nirmala Sitharaman.
Before the meeting, Thomson said the firm’s shareholders wanted the matter to be resolved quickly as the ‘award has been granted.’ “We are pleased it has come to an end and the award has been granted… Our shareholders want it to be resolved quickly which is why we’re here,” said Thomson.
The government had lost an international arbitration case to energy giant Cairn Plc under the retrospective tax legislation amendment.
The company had, in a letter to the Centre last month, threatened seizure of the Indian government’s assets if New Delhi failed to pay the award. Cairn had got an order from a Dutch lower court on implementation of the award, which would enable the UK firm to identify commercial Indian assets that can be seized, such as aircraft and ships, among others.
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.
It also includes the reversal of dividend as well as tax refund that the government had seized, and shares that the I-T department had sold to recover part of the demand.
India had argued, during the Cairn arbitration, that non-compliance to tax was not covered under international treaties and that the amendment in the Finance Act, 2012 (retrospective amendment), was only clarificatory in nature. The verdict was given by a three-member panel chaired by Laurent Levy. The final hearing was held in Paris in December 2018.