Saturday, August 28, 2021

U.S. court sets timelines for Cairn-India legal case

A federal court in Washington has set timelines for responses to be filed to an Indian government petition seeking dismissal of a suit by Britain's Cairn Energy that sought enforcement of a $1.2 billion arbitral award.

Judge Richard J Leon of the U.S. District Court for the District of Colombia has given Cairn time till September 10 to file a response to the government's 'Motion to Dismiss' petition.

Thereafter, the Indian government can file a reply in support of its motion by October 1.

This can be countered by Cairn by October 20 and a further two months have been granted to the Indian government to file its reply in support of its motion, according to an August 25 order of the court.

The British firm had in May asked the U.S. federal court to force Air India to pay the $1.26 billion arbitration award the firm had won in December.

The government on August 13 filed a 'Motion to Dismiss' petition saying the district court lacked subject matter jurisdiction in the dispute between Cairn and the Indian tax authority.

The move came within days of the government enacting a legislation to scrap a tax rule that gave the tax department power to go 50 years back and slap capital gains levies wherever ownership had changed hands overseas but business assets were in India.

That rule had been used to levy a cumulative of ₹1.10 lakh crore of taxes on 17 entities, including ₹10,247 crore on Cairn.

Officials said rules for withdrawal of such tax demands are in the process of being framed.

27/08/21 PTI/The Hindu

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