InvestorQ : Is it true that Cairn Energy has agreed to settle the tax dispute with Indian government?
Khushi Patel made post

Is it true that Cairn Energy has agreed to settle the tax dispute with Indian government?

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Dilmini Mercia answered.
1 month ago
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Cairn Energy has entered into a deal with the Indian government to settle its long-standing tax dispute over retrospective taxation. India will refund $1.06 billion pre-empted from Cairn Energy and in return Cairn will drop all legal proceedings against India. In fact, Cairn has also promised to pay a special dividend to its global shareholders out of the refund received from Indian government.

The settlement is being worked out under the Taxation Laws (Amendment) Act introduced specially by the government during this year to put an end to 17 such tax disputes over retrospective taxation and includes some high profile names like Vodafone, Cairn Energy and Nokia. As a starting point, Cairn will start intimating the withdrawal of various enforcement actions; including cancelling the arbitral award granted by the Tribunal.

Under the terms of the settlement, Cairn and related parties will have to agree that claims relating to arbitration award or court orders are no longer valid. They must also release the Indian government and any of its affiliates from all future awards, judgements and court orders. Indian government is keen to repair some of its damaged reputation as an investment destination; at a time when it is keen to attract FDI.

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