Cairn Energy PLC (LON:CNE) told investors it expects the long-running arbitration process against the Indian authorities to be more protracted than originally anticipated and is unlikely to be concluded before late 2019.
The oiler said in a statement that the international arbitration panel – which finished the main court hearings in August – had in December advised that due to the number of procedural matters before it since the hearings it was not in a position at that time to give guidance on the expected timing of a decision.
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Following subsequent correspondence, Cairn today said: “the panel has now responded that although it remains mindful of Cairn's need for a swift decision, given its workload and the number of matters before it, it is still unable to provide specific guidance on timing.
“As a result of this, Cairn expects that the timetable for issuing the award will be more protracted than originally anticipated and is unlikely to be before late 2019.”
Arbitration proceedings started back in 2015, in the wake of retrospective taxation actions undertaken by the Indian Income Tax Department (IITD) in 2014 – following the 2010 deal to sell Cairn’s stake in the Cairn India business to Vedanta.
Cairn is claiming US$1.5mln in compensation to reinstate the company to the position it would have been in but for the actions of the IITD.