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Cairn Energy (CNE) Share Price Surges After India Told To Pay $1.2bn

Sam Boughedda trader
Updated 23 Dec 2020

Practice Stock Trading
Cairn Energy (LON: CNE)

Shares of independent oil and gas exploration company, Cairn Energy (LON: CNE) are surging on Wednesday after India was ordered to pay $1.2 billion following arbitration proceedings in a tax dispute.

Cairn shares rose by 41.53% after the announcement and are currently trading at 234.8p.

Cairn’s claim was brought under the terms of the UK-India Bilateral Investment Treaty with the Netherlands being the tribunal's legal seat.

According to Bloomberg's report, the court ruled that the tax claim made by the Indian government was not a valid demand and said that the money withheld will need to be repaid to Cairn along with interest and costs.

UK-based Cairn received the tax claim in 2015 relating to a restructuring undertaken in 2006 while the company was preparing for an IPO of Cairn India. This prompted the Indian government to seize 10% of Cairn India’s shares.

Since that time, the company has sold off most of the holdings in its Indian arm. Cairn then filed its dispute, with arbitration starting in 2015.

Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.