Cairn Energy has dropped lawsuits against the government and its entities in the US and the UK. It is in the final stages of withdrawing cases in France and the Netherlands, which were filed to get back about Rs 7,900 crore that were collected from it to enforce a retrospective tax demand.
As part of the settlement reached with the government to the seven-year-old dispute over the levy of back taxes, the UK company has initiated proceedings to withdraw lawsuits it had filed in several jurisdictions to enforce an international arbitration award, which had overturned a levy of Rs 10,247 crore retrospective taxes and ordered India to refund the money already collected.
On December 15, it sought and got ‘voluntary dismissal of a lawsuit it had brought in a New York court to seize assets of Air India to recover the money due from the government. On the same day, it made a similar move in a Washington court where it was seeking recognition of the arbitration award.
Recognition of arbitration award is the first step before any enforcement proceedings like the seizure of assets can be brought.
Sources said the critical lawsuit in a French court, which had attached Indian properties on the petition of Cairn, is in the final stages of withdrawal. Paperwork is expected to get completed in the next couple of days.
The attachment of Indian assets, including some flats in Paris, in July used by the Indian government staff, had triggered scrapping of a 2012 amendment to the Income Tax Act that gave taxmen powers to go back 50 years and slap capital gains levies wherever ownership had changed hands overseas but business assets were in India.
