Finance ministry on Sunday said the international arbitration award of over $1.2 billion that British oil major Cairn Energy Plc. won in a dispute with India was highly flawed and that it wrongly backed an alleged tax avoidance scheme of the company.
In a formal statement, the ministry said that the arbitration panel improperly exercised jurisdiction in a national tax matter and that the Indian government will defend its case vigorously worldwide. The ministry, however, assured it remains committed to an amicable resolution to the dispute within Indian laws.
The ministry also called news agency reports that state-owned banks have been asked to withdraw funds from foreign accounts in view of Cairn Energy’s move to enforce the arbitration award as “totally incorrect,” and “not based on true facts.”
