Cairn Energy's Arbitration Plea rejected - Taxation Outside Arbitration
NEWSPAPERS all over the world reported that government has rejected Cairn Energy UK's plea for arbitration over a Rs 10,247-crore tax dispute saying taxation is not covered under the UK-India Investment Promotion and Protection Treaty.
But Cairn claims that it has not raised taxation under the treaty but is contending that by the government's action it has not been able to conduct its business in India.
After raising the tax demand over alleged capital gains it made on transfer of its India assets to a new company - Cairn India - in 2006, the Income-Tax Department barred it from selling its remaining 9.8 per cent stake in Cairn India.
The move, Cairn says, is hampering it from conducting its business, which includes sale of its remainder stake.