New Delhi: Geneva-based arbitrator Laurent Levy has been named as the presiding officer of the three-member arbitrator panel to resolve the Rs 10,247-crore tax dispute with British oil firm Cairn Energy plc.
Levy was approved as the neutral arbitrator on the panel last week after appointees of Cairn and the Government agreed to his name, sources said.
The appointment came just before Finance Minister Arun Jaitley embarked on his UK visit where he is to meet his British counterpart and Secretary of Exchequer George Osborne.
It was widely expected that Osborne in the meeting with Jaitley may seek early resolution to the 2-year old dispute.
Cairn too continues to push for an early resolution of the dispute saying no tax was due on its 2006 internal reorganisation.
Sources said Levy was finalised from a list of five arbitrators each forwarded by Cairn and the government.
His name was last week agreed upon by the two sides and confirmation letters were exchanged, they said.
The arbitration will first have to dispose of government objections over jurisdiction of the panel. It is of the opinion that tax policy cannot be a matter of arbitration and thats why it had for long opposed joining the arbitration.
India agreed to join the arbitration once Cairn moved the International Court of Justice seeking appointment of an arbitrator on behalf of the government.
While London-listed Cairn has named former Bulgarian minister Stanimir A Alexandrov as its arbitrator in the tax dispute, India in November appointed Singapore-based lawyer J Christopher Thomas as its arbitrator.
The third arbitrator, mutually decided, is the presiding judge of the three-member Arbitral Tribunal.
Cairn on March 10 last year sought arbitration under the India-UK Bilateral Investment Protection Agreement disputing the tax demand.
Last month Cairn Energy chief executive Simon Thomson wrote to Prime Minister Narendra Modi saying tax issue is has been dragging on for almost two years that has resulted in USD 1 billion loss in value, forcing it to sell assets, postpone investment and cut workforce by 40 percent.
In January 2014, Cairn was slapped with a Rs 10,247 crore assessment notice on alleged capital gains made on a 2006 internal reorganisation. However, no tax demand has been raised so far.
The Income Tax Department says Cairn Energy allegedly made a capital gain of Rs 24,503.50 crore in 2006 while transferring all its India assets to a new company, Cairn India, and getting it listed on the stock exchanges.
Cairn Energy, which had in 2011 sold majority stake in its Indian unit to mining group Vedanta for USD 8.67 billion, still holds 9.8 percent stake in Cairn India. But it has been barred by the I-T Department from selling this stake.
The value of the shareholding in Cairn India is down by two-third since attachment.