Britain's Cairn Energy cements end of India tax dispute with undertakings

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An employee at Cairn India, a unit of UK-based Cairn Energy Plc, works at a storage facility for crude oil at Mangala oil field at Barmer in the desert Indian state of Rajasthan on August 29, 2009. REUTERS/Parth Sanyal/File Photo

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Nov 3 (Reuters) - Cairn Energy (CNE.L) has entered into certain undertakings with India which would allow for the refund of taxes under a long-running billion dollar dispute with the country, sending the British company's shares nearly 3% higher on Wednesday.

The news comes after the oil and gas producer said in September it was considering undertakings with the Indian government after changes were made to a retrospective tax law at the heart of the row. read more

London-listed Cairn said it would start filing the necessary documents and work with New Delhi to expedite the refund of roughly 79 billion rupees ($1.06 billion).

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"Cairn will commence the filing of the necessary documentation ... intimating the withdrawal, termination and/or discontinuance of various enforcement actions," the company said in a statement.

Cairn added it expects to pay by early 2022 the special dividend announced in September. The dividend and a share buyback were contingent on the settlement of the dispute.

In August, India proposed scrapping the 2012 retrospective tax law and said it would refund companies including Cairn and Vodafone (VOD.L). read more

($1 = 74.4890 Indian rupees)

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Reporting by Pushkala Aripaka in Bengaluru; Editing by Krishna Chandra Eluri

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