New Delhi: Cairn Energy and Air India have jointly asked a New York federal court to stay further proceedings in the British firm's US lawsuit targeting the airline for enforcement of a $1.2-billion arbitral award.
But, last month, the government enacted the Taxation Laws (Amendment) Act, 2021, that scraps all such retrospective tax demands and has agreed to refund Rs 7,900 crore it had seized from Cairn to enforce such demand.
Cairn has indicated that the refund, without interest and penalty, was acceptable to it — opening an avenue to settle the seven-year-old dispute.
Cairn and Air India in a joint request to US District Judge Paul Gardephe on September 13 stated that a stay on proceedings would give them "additional time to evaluate the effects and implications" of legislation that repealed the retroactive tax.
In return for the Rs 7,900 crore, Cairn would drop lawsuits threatening court-ordered seizures of Indian government property abroad.
One of those suits was filed in May against state-owned Air India Ltd, which Cairn has said should be considered alter ego of the Indian government.
The British company had won an international arbitration award against levy of such taxes and sought to take over Air India assets when the government refused to honour the award and pay it $1.2 billion-plus interest and penalty.
15/09/21 PTI/Times of India
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