India has been ordered to return up to USD 1.4 billion to Cairn Energy plc of the UK after the government lost an international arbitration over the retrospective levy of taxes. The three-member tribunal, which also comprised a nominee of the Indian government, unanimously ruled that India’s claim of Rs 10,247 crore in past taxes over a 2006-07 internal reorganisation of Cairn’s India business was not a valid demand.
India, it said, “failed to accord the Claimants’ (Cairn Energy’s) investments fair and equitable treatment” under the bilateral investment protection pact the nation had with the UK, it said in a 582-page order.
