Case Analysis: Cairn Energy V the Republic of India (PCA Case No. 2016-7)

Abstract

The given article illustrates the facts and the analysis of the famous case where the Scottish firm, Cairn India had won an international arbitration case against the Government of India. The company Cairn Energy is basically occupied in the exploration of oil and natural gas in India. The dispute mainly revolves around the tax and investment arbitration agreement between the company and the Government of India. The issue was highlighted when a notice regarding non-filing of tax, was received by Cairn Energy from the department of Income Tax in 2014. The company imposed allegations against the Government of India that the Indian government has violated the terms of the India-UK Bilateral Investment Promotion and Protection Agreement (BIPA) by initiating the retrospective amendment in the Finance Act, 2012. Cairn also claimed that the company has suffered significant damage due to the Indian government’s action. In the verdict announced by the Permanent Court of Arbitration, the Indian government has been asked to pay damages worth Rs 8,842 crores (USD 1.2 billion) to the Scottish firm. This article encapsulates the facts, analysis, and the final award declared by the Permanent Court of Arbitration.