The Indian government has decided to appeal against a $1.2 billion international arbitration award won by Cairn Energy Plc. in a tax dispute and to strongly contest all cases filed by Cairn in various international courts, said a person informed about the development. The move signals the government’s resolve to defend its sovereign rights in taxation.
The government, however, has kept open the possibility of a resolution within existing Indian laws, the person said. This indicates the government’s willingness to settle the tax dispute if Cairn chooses to do so, under the direct tax dispute settlement scheme ‘Vivad se Vishwas’, which gives relief on interest and penalty if the principal tax demand is paid.