Vodafone, Cairn Near End of Retroactive-Tax Fights With India

After Vodafone Group Plc’s recent victory in an international tribunal against India in a $2.7 billion tax dispute, Cairn Energy Plc awaits a decision in a similar battle with the country’s tax authorities.

At issue in both cases is whether India’s tactics to recover taxes retroactively from the companies violate the “fair and equitable treatment” of foreign investors guaranteed under bilateral investment treaties. At stake is billions in tax bills for both companies and heightening business fears that India’s tax policies are discouraging foreign investment.

Last week the International Court of Justice in The Hague, Netherlands, asked India to halt ...