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India is believed to have challenged in a Dutch court an arbitration tribunal verdict that favoured British energy major Cairn Energy Plc in a tax dispute, news agency PTI reported.

The appeal was filed on Monday, the report said.

Emails sent to the finance ministry and to Cairn Energy seeking comments on the development remained unanswered till press time.

Mint had reported on 10 March that the government was in the process of filing the appeal and that it was determined to strongly defend any move by the company to enforce the award. Cairn Energy had won a $1.2 billion arbitration award in the tax dispute.

The government, however, has offered to settle the dispute under the Vivad se Vishwas direct tax dispute resolution scheme. In February, senior finance ministry officials met Cairn Energy Plc’s chief executive officer Simon Thomson to discuss a solution to the dispute. Thomson told reporters after the meeting that the discussions were constructive but no further progress has been reported.

In the meantime, courts in five countries including in the US and the UK have given recognition to the arbitration award.

The tax demand raised on Cairn was of around 104 billion in taxes plus equal amount in penalty and interest accrued. According to Cairn, the Indian government has seized residual shares in Cairn India Ltd. (acquired by Vedanta Resources) as well as a tax refund due to the British company, together amounting to approximately 105.7 billion or $1.4 billion. As a result of international arbitration, the company secured an award to the tune of $1.2 billion plus interest and cost.

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