OIL & GAS

$1.4bn arbitration award: Cairn says hopeful of solution, will take steps to protect shareholder interest

By ET News

After three days of talks with top finance ministry officials, UK’s Cairn Energy plc on Sunday said it is hopeful of reaching an amicable resolution on $1.4 billion that an arbitration award has ordered India to return, but insisted it will continue to take steps to protect shareholder interest.

Cairn CEO Simon Thomson held discussions with Finance Secretary Ajay Bhushan Pandey and over half a dozen other senior officials including CBDT Chairman between February 18 and 20 in an attempt to find a resolution to the issue without having to resort to extreme step of seizing Indian assets overseas to recover the money the firm has been awarded.

“We have had cordial and constructive discussions in Delhi over the last few days with officials from the Ministry of Finance.

“Notwithstanding and without prejudice to our rights under the international arbitration award, we have discussed a number of proposals with the aim of finding a swift resolution that could be mutually acceptable to the Government of India and the interests of Cairn’s shareholders,” the firm said in a statement.

Cairn, which gave the nation its biggest onland oil discovery, promised to return to India if the issue that arose after the income tax department in 2014 seized its assets after slapping a Rs 10,247 crore tax demand, was resolved.

Sources privy to Indian government thinking have indicated that New Delhi will challenge the arbitration award as taxation is a sovereign right but this did not figure during three days of talks.

Source
ET News
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