‘Not a question of domestic tax law, but whether India has violated international law'
Courts in five countries, including the US and the UK, have recognized an arbitration award that asked India to return $ 1.4 billion to Cairn Energy plc – a move that would now lead to the possibility of a British firm seizing Indian assets in those countries Opens if New Delhi does not pay, sources said.
Cairn Energy moved courts in nine countries to enforce a $ 1.4 billion arbitral award against India, which the company won after a dispute over retrospective capital gains tax with the country's revenue authority.
Of these, the December 21 award from a three-member tribunal in the Permanent Court of Arbitration Court in the Netherlands has been recognized and confirmed by the courts in the US, the UK, the Netherlands, Canada and France, said three people aware of the case. Cairn has begun the process of registering the award in Singapore, Japan, United Arab Emirates and the Cayman Islands.
The registration of the award is the first step towards its enforcement in the event of non-payment by the government to the firm. Once the court recognizes an arbitration award, the company can petition to pay any Indian government property such as bank accounts, state-owned entities, airplanes and ships to those jurisdictions, because its To cure deaths due to. The tribunal ruled on 21 December that the Indian government had violated the investment treaty with Britain
Finance Minister Nirmala Sitharaman indicated her intention to appeal against the Centre's award on 5 March when she said it was her ‘duty' to appeal in cases where the sovereign authority of the nation is concerned to be taxed.
“The point is… domestic tax is not a matter of law; Rather it is whether the financial measures taken by the state… violate international law, ”the tribunal had said.