Tribunal awards $1.2 billion plus interest, costs to Cairn Energy Plc in India tax dispute

An international arbitration tribunal has awarded $1.2 billion in damages plus interest and costs to British energy major Cairn Energy Plc in a protracted tax dispute with the Indian government over its business restructure in 2006, the company has said.

Cairn had moved the arbitration tribunal in connection with India’s 2015 tax demand amounting to $2,740 million over the group’s reorganisation resulting in creation of Cairn India Ltd prior to its initial public offering. The tax demand was made invoking the controversial tax law amendment India made in 2012 with retrospective effect.

Cairn informed the London Stock Exchange on Wednesday that the tribunal ruled favouring Cairn’s claim under the UK-India Bilateral Investment Treaty.