Lately, there has been various news reports on the development in Indian government and Cairn dispute. The finance ministry on Sunday put to rest some of those reports. It stated that the government is engaging with the representatives of the company in dispute.
The ministry stated the chief executive officer (CEO) and the representatives of Cairns have approached the Government of India for discussions to resolve the matter. "Constructive discussions have been held and the Government remains open for an amicable solution to the dispute within the country’s legal framework."
It stated that the Indian government is "vigorously defending its case in this legal dispute". Thus, the government has filed an application on March 22, 2021 "to set aside the highly flawed December 2020 international arbitral award in The Hague Court of Appeal," it stated. It reiterated the government is "committed to pursuing all legal avenues to defend its case in this dispute worldwide."
The government has raised several arguments that warrant setting aside of the award including but not limited to:
- the arbitral tribunal improperly exercised jurisdiction over a national tax dispute that the Republic of India never offered and/or agreed to arbitrate;
- the claims underlying the award are based on an abusive tax avoidance scheme that were a gross violation of Indian tax laws, thereby depriving Cairn’s alleged investments of any protection under the India-UK bilateral investment treaty; and
- the award improperly ratifies Cairn’s scheme to achieve Double Non-Taxation, which was designed to avoid paying taxes anywhere in the world, a significant public policy concern for governments worldwide.
The government condemned the news report that stated that the government has asked state-owned banks to withdraw funds from foreign currency accounts abroad in anticipation of the potential seizure of such accounts with regard to the Cairn legal dispute.
The ministry claimed that the news report stating that the government has asked state-owned banks to be vigilant, appears to be orchestrated by certain vested parties.