India Business Journal - After Vodafone, India loses Cairn case too

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After Vodafone, India loses Cairn case too

IBJ Bureau
Dec 31, 2020

In a major setback, the Union government has lost an international arbitration case to energy giant Cairn over retrospective levy of taxes. The government has been asked to pay damages worth $1.2 billion (Rs 8,842 crore) to the UK company. The case pertains to the Rs 24,500-crore tax demand on capital gains made by the oil company in reorganisation of its Indian business in 2006-07. The Permanent Court of Arbitration at The Hague in The Netherlands has maintained that the Cairn tax issue is in breach of fair treatment under the UK-India Bilateral Investment Treaty. The Cairn verdict follows barely three months after India lost arbitration to Vodafone over retrospective tax legislation amendment.