11th Mar 2019 08:33
LONDON (Alliance News) - Cairn Energy PLC on Monday said that while it is confident in its arbitration claim against the Indian Income Tax Department, it no longer expects the award to be issued before late 2019.
Oil and gas exploration and development company Cairn began its proceedings against India in 2015 after "retrospective taxation actions" by the country's Income Tax Department in 2014. Cairn claimed around USD1.4 billion.
According to Cairn, this USD1.4 billion figure is the amount required to reinstate "the position it would have been in" if the Indian tax department had not acted in this way.
Cairn said it expects that the arbitration panel will "issue a binding and internationally-enforceable award", and the company is confident of the merit of its arbitration claims.
With submissions and hearings now concluded, the panel is preparing its award. While the arbitration panel had originally expected to issue an award "expeditiously" after the main merits hearings of August 2018, "a number of procedural matters" caused delays.
In December, when both parties appeared before the tribunal, the arbitration panel could not give guidance as to when it would issue the award.
In February, when Cairn wrote to the panel again and asked for guidance, the panel said it was still unable to give specific guidance as to the timing of the award.
"As a result of this, Cairn expects that the timetable for issuing the award will be more protracted than originally anticipated and is unlikely to be before late 2019," Cairn said.
"The panel has said it will keep the parties updated regarding its progress," Cairn added.
Shares in Cairn Energy were down 4.9% at 186.50 pence on Monday morning.
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