Cairn Energy said on Sunday that it had discussed multiple proposals with Indian government officials in recent days in an attempt to find a ‘swift solution’ to a long drawn-out tax dispute with the South Asian nation, Reuters reported.
In December, an arbitration body awarded the British firm damages of $1.2 billion plus interest and costs, after ruling India had breached its obligations to Cairn under the UK-India Bilateral Investment Treaty. FE Bureau adds: As reported by FE earlier, the Indian government wants Cairn to settle the dispute using the Vivad se Vishwas scheme.
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New Delhi: UK's Cairn Energy Plc has won an arbitration against the Indian governmentlevying Rs 10,247 crore in retrospective taxes, the company said on Wednesday.
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While it is by no means perfect, international arbitration has become the primary mechanism by which disputes are resolved in the oil and gas industry. For cross-border transactions involving parties from a broad range of jurisdictions, or disputes between an investor and a state, there is no practical alternative. It provides the opportunity for an impartial, independent determination of a dispute with an established mechanism for the enforcement of awards in most jurisdictions in the world under the auspices of the New York Arbitration Convention of 1958. Unfortunately, the dispute resolution process itself is becoming increasingly complex and uncertain, adding a further layer of difficulty to the parties finding solutions to their disputes. The time and cost associated with international arbitration now compares unfavourably with litigation (which was never a good benchmark in the first place). Extended document disclosure requests and the willingness of arbitrators to accede to them is burying the process in indiscriminate evidence. And, despite the inherent flexibility and the discretion vested in the arbitrators, first procedural orders are not always designed to meet the specific needs of the parties or the dispute, nor do they provide for an efficient and cost-effective process. This fourth perspective is a cause of concern as uncertainty over the outcome of dispute resolution process only creates additional work and delay, benefiting the international arbitration industry and not the parties it is designed to serve.
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