Cairn Expects Court Ruling on Indian Dispute After Summer

UK producer Cairn Energy expects a long-awaited arbitration ruling on its $1.4bn claim against the Indian government by the end of this summer, despite disruptions caused by the coronavirus pandemic, it said on July 21.

Cairn is demanding compensation, under the UK-India bilateral investment treaty, for tax retroactively demanded in 2012 against restructuring deals it made six years earlier. Tax authorities presented Cairn with a $1.3bn bill in 2014 and then seized its 5% stake in Indian metals and mining group Vedanta in 2018, which had completed a buyout of Cairn India the previous year. The tax office then sold off these shares.

Hearings ended at the Hague in August 2018, but in May 2019, Cairn warned that the timeframe for reaching a verdict would be "more protracted" than it first thought.

"The arbitration tribunal has indicated that, whilst it has encountered some difficulties created by the Covid-19 pandemic, it does not expect significant delays and hopes to remain reasonably with the lead-time it had anticipated," Cairn said in a London stock filing. "Whilst it is not yet able to commit to a specific date for its ruling, it expects a release of the award after the end of the summer."