Cairn Energy flags further delays in arbitration with India

The FTSE 250 company confirmed final merits hearings for the arbitration were concluded during 2018.

Its claim under the treaty was for monetary compensation of around $1.4bn, being the sum required to reinstate the company to the position it would have been in save for the actions of the IITD since January 2014.

The arbitration panel was expected to issue a binding and internationally-enforceable award, with the Cairn board saying it continued to have a “high level of confidence” in the merits of its claims in the arbitration.

“Now that the merits submissions and hearings have concluded, the arbitration panel is preparing its final award with respect to Cairn's claim under the treaty,” the company’s directors said in their statement.

“The panel had originally guided the arbitration parties that it expected to issue an award expeditiously following the conclusion of the main merits hearings in The Hague held in August 2018.”

It explained that, when the parties appeared before the tribunal in December, the panel advised that it had not been able to advance the award as expected due to the number of procedural matters that had been brought before it since the August hearings, and that it is was not in a position at that time to give guidance to the parties on the expected timing of the issuance of the award.

Cairn said it subsequently wrote to the panel in February of this year, asking if it was then able to provide any guidance on timing, with the panel having now responded that although it remained mindful of Cairn's need for a swift decision, given its workload and the number of matters before it, it was 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,” the board said.

“The panel has said it will keep the parties updated regarding its progress.”