Cairn Energy Plc CEO Simon Thomson plans to meet finance minister Nirmala Sitharaman next week to press the Modi government to honour a $1.4-billion arbitration payout to the Scottish company.
Finance ministry officials said Sitharman had not given Thomson any appointment time yet.
“Cairn Energy CEO Simon Thomson is looking forward to meeting the Government of India finance minister in Delhi next week,” the company tweeted with a video of the chief executive urging a swift payout of the tax verdict.
“The arbitration is now finalised and the award has been given and we would request along with the others, that the Indian government moves swiftly to adhere to the award that has been given,” Thomson said in the video address.
He said the payout would send out an important message to Cairn’s shareholders, “who are global financial institutions and who want to see a positive investment climate in India”.
“I’m sure that in working together with the government, we can swiftly draw this to a conclusion, and reassure those investors as to the positive investment climate that India offers,” said Thomson in the video.
Edinburgh-based Cairn had written to the Centre last month saying it would be forced to seize the Indian government’s assets if New Delhi failed to pay it $1.4 billion after losing a bitter dispute over retrospective taxes.
An international tribunal had in December unanimously ruled that India violated its obligations under the UK-India Bilateral Investment Treaty in 2014, when the income tax department slapped a Rs 10,247-crore assessment using legislation that gave it powers to levy taxes retrospectively.
The revenue authorities had charged Cairn for not paying tax on alleged capital gains made by the company from a reorganisation of its Indian businesses prior to its listing in 2006-07. The government then proceeded to seize Cairn’s residual 10 per cent stake in Cairn India.
In a ruling that Cairn had previously described as “final and binding”, a Dutch tribunal ordered the Indian government to pay $1.2 billion in damages plus interest and costs to compensate Cairn for the shares long sold off by the tax department as well as for confiscating dividends and withholding tax refunds. This totals $1.4 billion.
The Cairn CEO is seeking the meeting with the finance minister to understand the Indian government’s response to the arbitration award. Its shareholders have been egging the management to take action to get the money back.
The 582-page verdict was handed down a month and a half ago. Even though it was directed to make the payment immediately, the government has given no indication of whether it will honour the award.
Earlier this week, minister of state for finance Anurag Singh Thakur had told the Lok Sabha that the Cairn arbitration award was “under consideration” of the government.
The government has appealed against a similar awared handed out to Vodafone in a Rs 22,000-crore retrospective tax demand case.
