New Delhi’s 2012 law empowering itself to make tax demands concerning cross-border deals all the way back to 1962, citing ‘underlying Indian assets’ has been exposed as a misadventure for the second time in a little over three months. The Permanent Court of Arbitration at The Hague on Wednesday not only invalidated India’s $2.74-billion 2015 tax claim on Cairn Energy, but also ordered it to return up to $1.4 billion in funds withheld, interest and costs, to the firm.
The new ruling came amid a looming December-end deadline for India to appeal against a similar September 2020 verdict by the same tribunal in favour of telecom major Vodafone (Now Vodafone-Idea in India) and anxiety among investors over India’s imminent move.
