Foreign companies have been dragging Indian government to international arbitration courts for not enforcing contracts. British oil explorer Cairn Energy initiated international arbitration against a Rs 10,247 crore retrospective tax demand raised by the government. Cairn too started international arbitration proceedings against India under the UK-India Bilateral Investment Treaty in 2015.The Modi government has inherited the problem of international arbitration from the previous regime. The Modi government decided to revise the treaties to prevent arbitration by foreign companies. Foreign companies dragging India to international arbitration not only leads to financial loss but also damages the reputation of the country as an investment destination.

Source: Economic Times December 02, 2017 08:15 UTC