THE Indian government has lost an international arbitration case against Cain Energy Plc over the controversial retrospective tax levy, months after facing a similar ruling against Vodafone. However, unlike the Vodafone case, the government will have to repay Cairn.

The British oil explorer had received a tax claim from India in March 2015 over an internal restructuring of Cairn India's business in 2006-07. The tax authorities had seized 10% of Cairn India shares, valued at roughly Rs 10,247 crore, in past taxes.

The company then filed a dispute under the India-U.K. Agreement for Promotion and Protection of Investments and sought international arbitration for seizing dividend, tax refund and sale of shares in late 2015.

The tribunal has asked India to refund the money withheld along with interest.

The government said they will be "studying the award and all its aspects carefully" and then consider all options on further course of action.