Tax case: India files appeal against Cairn verdict at The Hague

The appeal against a three-member tribunal at the Permanent Court of Arbitration at The Hague invalidating India’s Rs 10,247 cr tax claim on Cairn Energy and ordering the government to return the value of shares it had sold, dividends seized and tax refunds withheld, comes weeks before UK Prime Minister Boris Johnson’’s visit to India. 

The British PM is widely expected to broach India honouring international arbitration awards during his April 26 visit, another source said. In December, the Centre had challenged in a Singapore court an international arbitration tribunal verdict that overturned its demand for Rs 22,100 crore in back taxes from Vodafone Group Plc. 

Since the seat of Vodafone arbitration was Singapore, an appeal was filed in a court in that country. In the case of Cairn, the seat was The Hague and so an appeal has been filed in a court in the Netherlands, the first source said. 

The appeal was filed on a day when Minister of State for Finance Anurag Singh Thakur had told the Lok Sabha in a written reply that “any such decision on filing of appeal or otherwise is taken only after careful consideration of all aspects of the matter.” 

The tribunal’s 582-page detailed verdict that asked India to return $1.2 bnplus interest and cost to Cairn was registered in the Netherlands on Jan 8 and New Delhi acknowledged it on January 19, the source said. 

Finance Minister Nirmala Sitharaman had earlier this month indicated the Centre’s intent of appealing against the award on grounds of it questioning the sovereign powers of India to levy taxes.