InvestorQ : Why Cairn Energy PLC is seeking damages from Indian government and what does that mean for Vedanta?
swati Bakhda made post

Why Cairn Energy PLC is seeking damages from Indian government and what does that mean for Vedanta?

Answer
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Sam Eswaran answered.
4 weeks ago


In the aftermath of Vodafone PLC gaining a victory in the IAT in Hague, Cairn Energy Plc is seeking $1.40 billion compensation from the Indian government due to losses arising from the expropriation of demat holdings to enforce a retrospective tax demand.

Cairn PLC expects a decree on its challenge to the Indian government seeking Rs.10,247 crore in damages for opportunities lost. Now Cairn PLC is seeking full restitution for losses of more than USD 1.40 billion from the government enforcing tax measures wrongly.

Towards the outstanding demand, the Income Tax department attached the 10% shareholding of Cairn PLC in the erstwhile Cairn India, which was subsequently taken over by Vedanta. Apart from attaching its demat shares in Vedanta, IT department also seized dividends totalling Rs.1140 crore.

Cairn Energy PLC had initiated international arbitration against this move in 2015. Meanwhile, the IT department sold most of Cairn Energy's shares in Vedanta to partially recover its tax demand partially.