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cairn: Cairn, Air India seek stay on New York court proceedings – Times of India

NEW DELHI: Cairn Power and Air India have collectively requested a New York federal courtroom to remain additional proceedings within the British agency’s US lawsuit concentrating on the airline for enforcement of a $1.2-billion arbitral award.
The transfer follows the federal government enacting a legislation to scrap retrospective taxation within the nation, which in impact will lead to withdrawal of the Rs 10,247 crore tax demand on Cairn, in keeping with courtroom paperwork reviewed by PTI.
The British firm had gained a global arbitration award in opposition to levy of such taxes and sought to take over Air India property when the federal government refused to honour the award and pay it $1.2 billion-plus curiosity and penalty.
However, final month, the federal government enacted the Taxation Legal guidelines (Modification) Act, 2021, that scraps all such retrospective tax calls for and has agreed to refund Rs 7,900 crore it had seized from Cairn to implement such demand.
Cairn has indicated that the refund, with out curiosity 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 Decide Paul Gardephe on September 13 acknowledged {that a} keep on proceedings would give them “further time to judge the results and implications” of laws that repealed the retroactive tax.
In return for the Rs 7,900 crore, Cairn would drop lawsuits threatening court-ordered seizures of Indian authorities property overseas.
A type of fits was filed in Might in opposition to state-owned Air India Ltd, which Cairn has stated needs to be thought-about alter ego of the Indian authorities.
“The implementing rules are within the rulemaking course of and can take a while,” the 2 stated within the petition in search of extension of the October 21 deadline for the presentation of case papers and preliminary pretrial convention on October 28.
They requested the courtroom to “keep any additional proceedings on this matter by means of October 31, 2021, and reschedule the preliminary pretrial convention and, respectively, the deadline for the events to submit their Joint Pretrial Letter and Proposed Case Administration Plan, for brand spanking new dates in November 2021.”
“The Events have conferred and agreed that the keep will facilitate the environment friendly decision of the dispute, preserve the Court docket’s and Events’ sources, and isn’t supposed to hinder or delay,” they added.
Cairn had on Might 14 introduced a lawsuit within the New York district courtroom to carry Air India liable because the alter ego of the Republic of India for the obligations the federal government owes underneath a overseas arbitral award. The agency individually filed a petition earlier than the District Court docket for the District of Columbia to recognise and implement the arbitration award in opposition to India on February 12, 2021.
In search of to restore India’s broken status as an funding vacation spot, the federal government final month enacted new laws to drop Rs 1.1 lakh crore in excellent claims in opposition to multinationals similar to telecom group Vodafone, prescription drugs firm Sanofi and brewer SABMiller, now owned by AB InBev, and Cairn.
About Rs 8,100 crore collected from corporations underneath the scrapped tax provision are to be refunded if the corporations agreed to drop excellent litigation, together with claims for curiosity and penalties. Of this, Rs 7,900 crore is due solely to Cairn.
A global arbitration tribunal in December overturned a levy of Rs 10,247 crore in taxes on a 2006 reorganisation of Cairn’s India enterprise previous to its itemizing. It additionally requested the Indian authorities to return the worth of shares seized and offered, dividend confiscated and tax refund withheld. This totalled $1.2 billion-plus curiosity and penalty.
The federal government initially refused to honour the award, forcing Cairn to establish $70 billion of Indian property from the US to Singapore to implement the ruling, together with taking flag service Air India Ltd to a US courtroom in Might. A French courtroom in July paved the best way for Cairn to grab actual property belonging to the Indian authorities in Paris.
All these litigations will likely be dropped as soon as Rs 7,900 crore is paid, Cairn CEO Simon Thomson had instructed PTI earlier this month.

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