Cairn withdraws lawsuit against govt. in US and UK.
- ByStartupStory | December 27, 2021
Energy major Cairn Energy Plc has finally withdrawn the lawsuits filed against the Indian government and its entities overseas in a ₹10,247 crore retrospective tax case. The tax department had used the 2012 legislation to levy Rs 10,247 crore in taxes on alleged capital gains Cairn made on reorganisation of its India business prior to its listing in 2006-07.
As part of the settlement reached with the government to the seven-year old dispute over levy of back taxes, the company – which is now known as Capricorn Energy PLC – has initiated proceedings to withdraw lawsuits it had filed in several jurisdictions to enforce an international arbitration award which had overturned levy of Rs 10,247 crore retrospective taxes and ordered India to refund the money already collected. On November 26 Cairn withdrew the lawsuit it had brought in Mauritius for recognition of the arbitration award and took similar measures in courts in Singapore, the UK and Canada.
Seeking to repair India’s damaged reputation as an investment destination, the government in August enacted new legislation to drop Rs 1.1 lakh crore in outstanding claims against multinationals such as telecom group Vodafone, pharmaceuticals company Sanofi and brewer SABMiller, now owned by AB InBev, and Cairn. The government last month notified rules that when adhered to will lead to the government withdrawing tax demands raised using the 2012 retrospective tax law and any tax collected in the enforcement of such demand is paid back.
According to reports, the critical lawsuit in a French court, which had attached Indian properties on the petition of Cairn, is in the final stages of withdrawal. Paper work is expected to get completed in the next couple of days.
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