Cairn Energy awarded US$1.2bn by tribunal in Indian tax dispute

Cairn Energy PLC (LON:CNE) said it has been awarded costs and damages worth US$1.2bn by a tribunal in the Netherlands for a tax dispute with India dating back to 2015.

In a statement, Cairn said that the tribunal ruled unanimously that India had breached its obligations to the company under a treaty with the UK.

The damages include interest and costs and have now become payable, the company said in a statement.

Cairn brought the claim under the terms of the UK-India Bilateral Investment Treaty, the legal seat of the tribunal was the Netherlands and the proceedings were under the registry of the Permanent Court of Arbitration, the statement added.

The complaint was filed in 2015 following a capital gains demand of US$1.4bn from India’s tax authorities that stemmed from the listing of the oil group’s Indian arm in 2007.

Cairn sold most of its stake in the Indian business to Vedanta in 2011, but the outstanding 10% was seized by the Indian government in 2014 along with dividends owed to the FTSE 250 company via its holding in Vedanta.