Cairn Energy of UK is willing to suspend its appeal to International Court of Justice seeking appointment of an arbitrator on behalf of Government of India to resolve the Rs10,247 crore tax dispute, provided an arbitral panel is put in place by November 11.
The British oil explorer late last month wrote to Finance Minister Arun Jaitley reminding him of government’s promise to appoint an arbitrator “soon” to resolve the issue.
Sources privy to the development said Cairn told Jaitley that he and the Government on two separate occasions in September promised to appoint an arbitrator but no tangible progress has been made even after more than six weeks.
Cairn on March 10 sought arbitration under the India-UK Bilateral Investment Protection Agreement disputing the tax demand raised on a 2006 internal business reorganisation, but the Government initially refused to join it, saying tax disputes are not covered under the bilateral treaty.
The British firm in September moved The Hague-based International Court of Justice seeking appointment of an arbitrator on behalf of the Government of India.