The British Cairn Energy Plc has obtained an order from a French court authorizing the freezing of 20 Indian government properties in Paris valued at more than 20 million euros, the London-based Financial Times reported Thursday. This is the first court order issued against India to enforce a $ 1.2 billion arbitration award that Cairn Energy won against the Indian government in the retrospective tax dispute. On Thursday, the finance ministry said it had not received any communication on this subject from any French jurisdiction and that it was trying to verify the facts.
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The arbitration between India and Cairn challenged India’s retrospective phone number library taxation policy. In 2012, India passed legislation imposing retroactive tax claims on transactions dating back to 1962 in which shares of non-Indian companies were transferred to an Indian holding company.
In 2006, Cairn made an offer to consolidate its Indian assets under a holding company – Cairn India Limited. In doing so, Cairn UK transferred shares of Cairn India Holdings to Cairn India Limited, essentially transferring shares of non-Indian companies to an Indian holding company.
Later, when Cairn India sold around 30% of its shares in an initial public offering, mining conglomerate Vedanta Plc acquired most of Cairn Energy, but Cairn UK was not allowed to transfer its share. 9.8% stake in Cairn India owned by Vedanta. Indian tax authorities have stated that capital gains tax in excess of Rs 6,000 crore was payable by Cairn UK for transactions in 2006, even though the transactions had already been authorized by them.