Arbitration Tribunal Finds in Favor of Cairn Energy in Case Involving India's Retrospective Taxation of Indirect Transfer

A Tribunal of the Permanent Court of Arbitration (PCA) has issued its decision in the case of Cairn Energy PLC & Cairn UK Holdings Limited v. India. The case involves a retrospective capital gains tax assessment resulting from changes made by the Finance Act 2012 to the Income Tax Act, 1962 (ITA) regarding the taxation of indirect transfers. The Finance Act 2012 added an explanation to the ITA to clarify that any share or interest in a company or entity registered or incorporated outside …