India challenges $1.2 billion Cairn arbitration award

Finance Ministry says India never agreed to arbitrate national tax dispute.

India has challenged an international arbitration tribunal asking it to return $1.2 billion to U.K.'s Cairn Energy Plc on grounds that it had never agreed to arbitrate over a "national tax dispute", the Finance Ministry said on Sunday. While the government appointed a judge on the three-member arbitration panel and fully participated in the proceedings against India seeking ₹10,247 crore in back taxes from Cairn, the Ministry said the tribunal "improperly exercised jurisdiction over a national tax dispute that the Republic of India never offered and/or agreed to arbitrate." India had seized and sold shares of Cairn in its erstwhile India unit, confiscated dividend due and withheld tax refunds to recover the tax demand it had levied two years after passing a law in 2012 that gave it powers to levy tax retrospectively.