Finance Ministry Condemns Reports Of State Banks Asked To Withdraw Cash Held Abroad Over Cairn Dispute

The Ministry of Finance in an official statement on Sunday said that reporting in certain media by some vested interests are "totally incorrect" and "not based on true facts." The centre said that it vigorously defends the case in this legal dispute.

Union Finance Minister Nirmala Sitharaman

New Delhi: The Government of India has dismissed media reports and clarified that it did not ask the state-owned banks to withdraw funds from foreign currency accounts held abroad in anticipation of the potential seizure of such accounts with regard to the Cairn legal dispute.

The Ministry of Finance in an official statement on Sunday said that reporting in certain media by some vested interests are "totally incorrect" and "not based on true facts." The centre said that it vigorously defends the case in this legal dispute.

"Government of India is vigorously defending its case in this legal dispute. It is a fact that the Government has filed an application on March 22, 2021 to set aside the highly flawed December 2020 international arbitral award in The Hague Court of Appeal," the statement read. 

It further said that the central government has raised several arguments that warrant setting aside of the award including but not limited to three things. 

"One is the arbitral tribunal improperly exercised jurisdiction over a national tax dispute that the Republic of India never offered and/or agreed to arbitrate. Second is the claims underlying the award are based on an abusive tax avoidance scheme that were a gross violation of Indian tax laws, thereby depriving Cairn’s alleged investments of any protection under the India-UK bilateral investment treaty. The third is the award improperly ratifies Cairn’s scheme to achieve Double Non-Taxation, which was designed to avoid paying taxes anywhere in the world, a significant public policy concern for governments worldwide." 

As per the statement, the proceeding is pending and the Centre is committed to pursuing all legal avenues to defend its case in this dispute.