Cairn Energy said it has received a notice on the petition filed by the Indian government that appeals to the Dutch Court of Appeal to set aside the court’s December 21, 2020, arbitration award.

The company has full confidence on its position and “as previously advised, Cairn will continue to take all steps necessary to protect the interests of its shareholders”, Cairn said.

The firm has moved courts in nine countries to get the arbitral award registered and recognised. Once the court recognises an arbitration award, the company can petition it to seize any Indian government asset such as bank accounts, payments to state-owned entities, aeroplanes and ships in those jurisdictions, to recover the amount due to it.

It said the award is binding on the parties under the terms of the Treaty and UNCITRAL arbitration rules, and it is enforceable internationally under the 1958 New York Convention.

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 Rs 10,247-crore tax assessment using legislation that gave it powers to levy taxes retrospectively.

India had lost another major international case against Vodafone over a $2 billion retrospective tax dispute. The government has challenged the verdict in the Vodafone case.

After losing a Supreme Court case against levying tax on capital gains made in the 2007 sale by Hutchison of its India business to Vodafone for $11.2 billion, the government had in 2012 enacted a legislation that gave it powers to tax such deals retrospectively.

Thereafter the tax department said Vodafone should have withheld tax on the deal and issued a notice seeking Rs 11,218 crore, later augmented by Rs 7,900 crore in penalties.

In January 2014, the department assessed that Cairn too made an alleged capital gain on reorganising its India business prior to an IPO in 2006-07 and sought Rs 10,247 crore in taxes. But unlike Vodafone where no enforcement action was taken, it seized and sold Cairn's residual stake in the India unit, confiscated dividends due from such holding, and stopped tax refund due to it.