CAIRN Energy is facing a further delay as it awaits the outcome of a long-running tax dispute with the Indian government.
However, shares in the Edinburgh-based company rose yesterday amid apparent relief that an end to the saga is in sight.
Victory in the case for Cairn could pave the way to the company making big payouts to shareholders.
READ MORE: Cairn Energy boss highlights prospect of significant payouts to investors
Cairn has been doing battle with the Indian government since 2014 when it was landed with a $1.6 billion tax claim.
This concerned events leading up to an initial public offering of shares in the company’s former subsidiary in India in 2006.
Cairn insists it has paid all taxes due in India and has submitted a claim for more than $1.4 billion compensation from the country’s government
The matter has been under consideration by an international arbitration panel in the Hague since 2018.
In January last year Cairn said it expected a decision in the near term but the timetable has slipped significantly. In October last year the tribunal indicated that it would make a decision this summer.
READ MORE: Scottish oil firm hit by fresh delay in Indian tax case
Cairn told investors yesterday: “The Arbitral Tribunal has indicated that, whilst it has encountered some difficulties created by the Covid-19 pandemic, it does not expect significant delays and hopes to remain reasonably within the lead-time it had anticipated.”
It said whilst the tribunal was not yet able to commit to a specific date for its ruling, it expected a release of the Award after the end of the summer.
Cairn’s chief executive Simon Thomson has said the company could make significant payouts to investors if it won the dispute.
Cairn has been generating lots of cash in the North Sea after starting production from two big fields in 2017.
READ MORE: Cairn generates bumper profits in North Sea as revenues hit $500m
In January the company approved plans to develop the bumper Sangomar find it made off Senegal.
Cairn made big finds in India under the leadership of its founder Sir Bill Gammell.
The company sold a controlling stake in its former subsidiary, Cairn India, to Vedanta for $5.4bn in 2011.
The Indian government has blocked Cairn from selling its remaining stake in since January 2014.
Mr Thomson succeeded Sir Bill in 2011.
Cairn shares closed up 4.9p at 135.2p.
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