The government has decided to file an appeal against the Cairn Arbitration award; meanwhile, the company's senior leaders will meet the Finance Minister again today to discuss the tax dispute.

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As per CNBC-TV18 sources, the government will contest its sovereign rights to tax and other suits filed by Cairn Energy at various international courts.

While the government has welcomed Cairn's move to reach out for a resolution, it has said, any dispute resolution to be sought by Cairn will have to be within already existing laws.

Cairn Energy had filed a case in the US district court to enforce a $1.2 billion arbitration award it won in a tax dispute against India. It had asked the court to recognize and confirm the award, including payments due since 2014.

In December, an arbitration body awarded the British firm damages of more than $1.2 billion-plus interest and costs. The tribunal ruled India breached an investment treaty with Britain and said New Delhi was liable to pay. If it did not, the company was ready to recover its dues, even if it had to seize Indian assets.

However, the company aims to enforce the award under international arbitration rules, also called the New York Convention, and recover its losses caused by India's "unfair and inequitable treatment of their investments."

India had previously lost another major international arbitration case against Vodafone over a $2 billion retrospective tax dispute. The government has challenged the arbitration verdict in the Vodafone case. It has yet to say how it will proceed in Cairn's case to make a significant payment.

First Published:Feb 19, 2021 9:24 AM IST