After three rounds of discussions on the $1.2 billion retrospective tax litigation last week, the government and UK-based Cairn Energy PLC have expressed hope to settle the matter amicably outside the court through legally available mechanisms such as the tax amnesty scheme “Vivad se Vishwas” [from dispute to trust], two people with direct knowledge of the matter said on Sunday. In a statement on Sunday, Cairn Energy said the two parties have discussed “a number of proposals with the aim of finding a swift resolution that could be mutually acceptable to the Government of India and the interests of Cairn’s shareholders”. The statement came after finance secretary Ajay Bhushan Pandey and Cairn Energy chief executive Simon Thomson discussed the matter on Thursday, Friday and Saturday. Pandey is leading an inter-ministerial team holding discussions with the visiting Cairn delegates led by Thomson.
One of the people mentioned above said discussions have progressed in the right direction so far. “The government is hopeful about a mutually acceptable solution soon within the legal framework, and Vivad se Vishwas is the legal framework,” he said on condition of anonymity. HT first wrote about it on February 16.“Another meeting cannot be ruled out as both parties the government and Cairn are willing to resolve the dispute as soon as possible,” he added.
Cairn said its discussions with the officials of India’s finance ministry were “cordial and constructive” “notwithstanding and without prejudice” to the company’s rights under the international arbitration award.
“Assuming such a resolution can be achieved, we look forward to being able to move on to further opportunities to invest in India which continues to import the majority of energy sources it consumes,” it said in the statement.