Scottish oil firm Cairn Energy said today that the final hearings will start next month in its arbitration with India under a bilateral investment treaty.
All of the written submissions by Cairn and the Indian Government have now been made and the final arbitration hearings are scheduled for two weeks commencing on 20 August 2018 in The Hague.
The dispute started in 2014 when Cairn was accused of not paying taxes owed following the formation of its Indian subsidiary. Cairn has challenged the claim.
Cairn is currently unable to access the value in its shareholding in Vedanta Limited, valued at more than $1billion or the accrued dividend payments due of $155 million.
The Indian Income Tax Department (IITD) has also offset a tax rebate of $234m due to Cairn as a result of overpayment of capital gains tax on a separate matter.
Cairn has now been notified by the IITD that it has sold part of Cairn’s shareholding in Vedanta, realising and seizing proceeds of US$216m. Following this sale, Cairn’s retained holding in VL is now about 3%, having previously been closer to 5%.
It is possible that the IITD may make further sales.
A spokeswoman for Cairn said: “We are seeking full restitution for losses totalling approximately $1.3bn resulting from India’s expropriation of its investments in India in 2014, and India’s unfair and inequitable treatment of those investments, due to the imposition of retrospective tax measures.”