British explorer Cairn Energy Plc has won an arbitration award against the Indian government in a tax dispute case in a second blow to the government in three months on the controversial retrospective tax levy.
The award would mean that the government have to pay more than Rs 7,500 crore to the energy company as the amount it seized by denying Cairn its share of dividend and income tax department liquidating portion of the residual shares that the company had in Cairn India post its merger with Vedanta.
An international arbitration tribunal ruled that India's tax claim of Rs 10,247 crore in past taxes over a 2006-07 internal re-organisation of Cairn's India business was not a valid demand, sources said.
In September, an international arbitration tribunal ruled against India levying retrospective taxes on Vodafone Group.
The tribunal has also asked India to refund the money withheld along with the interest to the Scottish oil explorer for seizing dividend, tax refund and sale of shares to partly recover the dues.
The government can appeal against the Tribunal ruling. The government is yet to comment on the ruling and what it intends to do.