“These are completely incorrect stories which weren’t based mostly on true details,” the ministry stated in a press release issued Sunday.
The ministry stated that the federal government was strongly defending its case in opposition to the arbitral award within the The Hague Court docket of Attraction on a number of grounds, after it filed an utility on March 22, 2021 to put aside the award issued in December 2020.
One of many arguments has been that the arbitral tribunal improperly exercised jurisdiction over a nationwide tax dispute that India by no means supplied or agreed to arbitrate, the ministry stated within the assertion.
In one other argument, the federal government has stated that the claims underlying the award are based mostly on an abusive tax avoidance scheme that had been a gross violation of Indian tax legal guidelines, thereby depriving Cairn’s alleged investments of any safety below the India-UK bilateral funding treaty.
“The award improperly ratifies Cairn’s scheme to attain double non-taxation, which was designed to keep away from paying taxes anyplace on the earth, a big public coverage concern for governments worldwide,” the ministry stated.
The worldwide arbitration tribunal ordered the federal government to return the worth of shares it had offered, dividends seized and tax refunds withheld, amounting to over $1.2 billion, to UK-based oil main Cairn Energy in a tax dispute.
Cairn Vitality has begun proceedings in worldwide courts to grab Indian belongings abroad to recuperate the dues from the federal government. It has moved the Southern District of New York, US, to connect belongings of nationwide service Air India. It has additionally recognized Indian belongings in abroad jurisdictions which it may seize if India didn’t pay up the damages as spelt out by the award. Cairn has pegged the entire dues from the Indian authorities at $1.7 billion by the year-end.
The finance ministry stated Sunday that the federal government was pursuing all authorized avenues to defend its case on this dispute worldwide. ET reported final week that the federal government has additionally engaged a group of attorneys to struggle any enforcement motion.
The developments unfolded even after prime Cairn executives together with CEO Simon Thomson met Indian authorities officers in February this yr on the matter.
“Constructive discussions have been held and the federal government stays open for an amicable answer to the dispute inside the nation’s authorized framework,” the finance ministry added.