Cairn is seeking full restitution for losses resulting from the expropriation of its investments in India in 2014; continued attempts to enforce retrospective tax measures; and the failure to treat the company and its investments fairly and equitably
British oil and gas explorer Cairn Energy Plc on Tuesday said it is seeking $1.4 billion ( ₹10,300 crore) from the Indian government in losses arising from the expropriation of its investments to enforce a retrospective tax demand.
“Cairn is seeking full restitution for losses resulting from the expropriation of its investments in India in 2014; continued attempts to enforce retrospective tax measures; and the failure to treat the company and its investments fairly and equitably," a Cairn Energy spokesperson said in an emailed response to Mint.
Cairn also said that the hearing took place on 20-31 August 2018 in the Hague, with a final hearing in Paris in December 2018. Drafting of the final award with respect to Cairn’s claim under a bilateral investment treaty between India and the UK is ongoing and the arbitral tribunal is expected to issue an award shortly, the company said.
A petroleum ministry spokesperson did not respond to an emailed query from Mint.
The Cairn Energy case is the second most high-profile retrospective tax litigation. Last week, an arbitration court in the Hague ruled that India’s ₹22,000-crore demand from Vodafone Group Plc violated the bilateral investment treaty (BIT) between India and the Netherlands, adding that any attempt to enforce the demand would violate India’s international law obligations.
Cairn Energy began investing in India in the 1990s, becoming one of the first international companies to participate in the country’s oil and gas industry. While it became the operator of the Ravva oil and gas field on India’s eastern coast initially, it was in January 2004 that the company made its biggest hydrocarbon discovery of the Mangala oil field in Rajasthan. This was followed by discoveries of Bhagyam and Aishwarya oil fields nearby.
In total, Cairn and its partners invested ₹45,000 crore in India in various projects. It also built the Mangala Processing Terminal which still accounts for more than a third of the country’s crude oil production.
Utpal Bhaskar in New Delhi contributed to this story.