Govt to appeal against Cairn Energy arbitration award
Government believes the arbitration tribunal cannot question a nation’s sovereign right to tax
NEW DELHI: The government is likely to file an appeal against the Cairn arbitration award contesting its sovereign rights to tax, sources said.
An international tribunal in December, had unanimously ruled that India violated its obligations under the UK-India Bilateral Investment Treaty in 2014, when the income tax department had slapped a ₹10,247crore tax assessment using legislation that gave it powers to levy taxes retrospectively.
Soon after seeking ₹10,247 crore in taxes over alleged capital gains made by the company over a 2006-07 reorganisation of India business before its listing, the tax department seized Cairn’s residual 10% stake in Cairn India.
In a ruling, which Cairn had previously described as “final and binding”, the tribunal had ordered New Delhi to pay $1.2 billion in damages, plus interest and costs, to compensate Cairn for the shares—long sold off by the tax department—as well as confiscated dividends and withheld tax refunds. This totals to $1.4 billion.
Its shareholders have been egging the management to take action to get the money back.
Cairn chief executive Simon Thomson had met Finance Secretary Ajay Bhushan Pandey on Thursday to discuss the arbitration award.
The people said the government is planning to file an appeal against the tribunal order and it believes the arbitration tribunal cannot question a nation’s sovereign right to tax.
Britain’s Cairn Energy plc has filed cases in the US, the UK and the Netherlands courts to register a $1.4 billion arbitration award it had won in a tax dispute against India, as a preparatory action in case it is not paid
by the Indian government.
Cairn filed a petition in a Washington DC Federal court on February 12, and followed it up with similar filings in the UK and the Netherlands courts.
People familiar with the matter said the government will strongly contest other suits filed by Cairn Energy at various other international courts.
The people said any dispute resolution to be sought by Cairn will have to be within already existing laws.
In a letter to the Indian government last month, Cairn had said its shareholders “expect an
early resolution, failing which they will expect Cairn to pursue the award in conformity with its rights under the treaty”.
“The award can be enforced against Indian assets in numerous jurisdictions around the world for which the necessary preparations have been put in place,” it added.
The letter did not specify the assets that might be seized but it is widely speculated that the targets could include bank accounts as well as mobile and immobile property, including the assets of public sector enterprises such as state-owned Air India, but not
diplomatic assets.
Earlier this month, Minister of State for Finance Anurag Singh Thakur had told Lok Sabha that the Cairn arbitration award was “under consideration of the government.” Cairn Energy had in 2011, sold Cairn India to mining billionaire Anil Agarwal’s Vedanta Group, barring a minor stake of 9.8%.
It wanted to sell the residual stake as well but was barred by the I-T department from doing so.
The government also froze the payment of dividends by Cairn India to Cairn Energy.
Rajasthan Royals’ Director of Cricket, Kumar Sangakkara while agreeing on Friday that the price of Chris Morris was on the higher side in the Indian Premier League (IPL) mini-auction, he was happy to have the South Africa allrounder for his ability to finish the games with the bat.
Morris on Thursday became the most expensive player at an IPL auction after he was bought by Rajasthan Royals for ₹16.25 crore. Morris entered with a base price of ₹75 lakh. Mumbai Indians and Royal Challengers Bangalore (RCB) both showed interest before Rajasthan Royals made a belated entry after RCB pulled out at ₹10 crore.
Bidding continued between Mumbai Indians and Rajasthan Royals and the South African allrounder was finally sold to the Royals. The fee smashed the record Rs 16 crore paid for Yuvraj Singh by Delhi Daredevils in 2015. “We’re also glad to get Chris Morris with us simply for what he brings to the side, both with the bat and ball. With the ball especially, his numbers across the IPLs are really good and his ability to finish games with the bat down the order is useful,” said Sangakkara.
“Yes the price was on the higher side, but we’re looking for a very specific role with Chris and really happy to have someone like him in our squad,” he added. India all-rounder Shivam Dube was also picked by Rajasthan Royals for ₹4.4 crore during the auction. Sangakkara, the former Sri Lanka skipper said that the side was specifically looking for someone like Shivam
for the middle-order spot.
“It was an exciting auction. From our point of view we were targeting certain players and we’re happy to get our targets. We were looking at Shivam Dube for that middle-order spot in our batting line-up and finally got him,” said Sangakkara.
“We’re excited to have picked up some talented Indians, all of whom add different dimensions to our squad. As a team, we’re delighted with the targets we were able to get and looking forward to working with the squad during the IPL now,” he added.
The Royals also added Bangladesh left-armer Mustafizur Rehman to their fast-bowling arsenal for the season at his base price of ₹1 crore. Mustafizur brings in big international and IPL championship experience with him to the Royals squad.
Manoj Badale, lead owner, Rajasthan Royals also spoke on the auction acquisitions: “You can only really judge the auction after the tournament’s played
out but we’re really pleased with the proceedings, in terms of the plans we had and the players that we targeted, we’re quite pleased with how it unfolded for us,” he said.
There’s going to be a lot of talk about the money we had to spend to get Chris Morris but as I’ve said on countless occasions, the auctions are a representation of a player’s value with regards to certain franchises for a particular role. As was evident by MI, RCB, Punjab Kings all going after Chris, he is a special player with special abilities, especially with his death bowling. What’s really nice is that he’s been a part of the Royals previously and we’re very excited to have him back,” Badale added. Another leftarmer added to the pace brigade is Chetan Sakariya, the Saurashtra pacer has already made a name for himself on the domestic circuit and the Royals were quick to swoop in and get him for ₹1.20 cr ahead of Royal Challengers Bangalore.
Perfect balance: Kumble CHENNAI:
Punjab Kings head coach Anil Kumble is happy with the squad for this year’s IPL and said on Friday they have the perfect balance of youth and experience in the team. “We were looking forward to some smart buys which can balance the core of Punjab Kings squad and strengthen our team structure. We have the perfect balance of youth and experience in the squad. We are confident that we have struck the right chords to come out stronger and better,” Kumble said.
In the IPL 2021 Auction, Punjab Kings brought on board nine new players for the upcoming season. Punjab Kings bagged players like Australian pace sensation Jhye Richardson, Australian all-rounder Riley Meredith and further strengthen the team with 25-year-old Shahrukh Khan, Moises Henriques, and Dawid Malan. Richardson was bought by Punjab Kings for ₹14 crore while Meredith was bought for ₹8 crore. Also joining the team are Fabian Allen, Jalaj Saxena, Saurabh Kumar, and Utkarsh Singh.
Delhi Capitals happy
NEW DELHI: Delhi Capitals co-owner Parth Jindal said that they are shocked to get Steve Smith “only for ₹2.2 crore” and feels that the Australian player will add a lot to their squad.
“It was just incredible to get Steve Smith. We are shocked about how he went only for ₹2.2 crore, but to get a player of the calibre of Steve Smith, it’s going to add a lot to our squad, a lot to our balance. His leadership, his batting, his experience, everything. Everyone associated with Delhi is just thrilled. We discussed Smith’s name before the auction and we thought that he would go for much higher, so we had thought that if an opportunity arises, we will go for him, but we never anticipated actually getting him,” Jindal said.
Delhi Capitals acquired World Cup-winning player Smith along with exciting overseas players in the IPL 2021 auction. Smith was bought by the Delhi-based franchise for ₹2.2 crore, while experienced T20 players Tom Curran and Sam Billings were bought for ₹5.25 crore and ₹2 crore respectively. The Delhi Capitals also acquired four domestic players -- Lukman Meriwala, Ripal Patel, Vishnu Vinod, and Manimaran Siddharth at their base price of ₹20 lakh.
Reflecting on the squad, Jindal said: “I think it’s a very exciting squad yet again. Meriwala has been doing really well in the domestic tournaments and he’s an Indian left-arm quick which we didn’t have in our squad last year. He gives us an added variation and Tom Curran has the cutters, the slower ones, the quick ones and he’s very good with the bat as well, so he gives that added balance to the squad.” Smith, who represented RR in IPL 2019 and 2020, has scored 2,333 runs in 95 matches at an average of 35.34 in his IPL career. The batsman had a fantastic season for the Rising Pune Supergiant in IPL 2017 when he amassed 472 runs in 15 matches.