Cairn Energy has asked the government to withdraw the tax demand as well as compensate it for damages sustained \u2014 the taxman attaching $1 bn of Cairn India shares in January 2014 caused Cairn Energy\u2019s share price to fall 43% as it could no longer meet its investment commitments. Cairn has asked for the arbitration to be fast-tracked and waiver of the good-faith negotiations period. Cairn Energy\u2019s request, after the taxman issued it a tax demand for R10,247 crore, is significant since the other case where the government has been taken to an international arbitration \u2014 by Vodafone, in April 2014, under the India-Netherlands BIPA \u2014 has not even reached the stage of arbitration with the two sides still in dispute over the appointment of the presiding arbitrator. Under the terms of the UK-India treaty that Cairn Energy has invoked, the company and the government of India are required to enter a \u2018period of negotiations to seek a resolution to the dispute\u2019. Sources said Cairn\u2019s view is that a quick outcome would be in the best interests of both parties \u2014 while a quick outcome would help Cairn Energy get back its 184 million Cairn India shares, it would also help India regain international investor sentiment. Cairn Energy said \u201cthe Republic of India\u2019s actions breach several of its obligations under the UK-India Investment treaty\u201d including under Article 3 to \u201ccreate favourable conditions\u201d and to ensure \u201cfair and equitable treatment\u201d and \u201cfull protection and security\u201d for Cairn\u2019s investments by introducing unfair and arbitrary tax obligations through the retrospective tax legislation of 2012. Cairn Energy has also said India\u2019s actions are in breach of Article 5 which says investments will not be expropriated \u2014 in this case, Cairn Energy\u2019s shares were attached. India is also said to be in breach of Article 7 since it restricted the transfer of Cairn\u2019s investments. While it is not clear whether the government will accede to Cairn\u2019s request for early arbitration, finance minister Arun Jaitley has gone on record several times to acknowledge the adverse effects of the retrospective tax.