The former Cairn Energy has received a tax refund from the Indian Government worth around $1 billion (£0.75bn) following the end of a dispute that started in 2014.

The Edinburgh-based company, which changed its name to Capricorn Energy in December, said it was pleased to confirm that the Indian tax refund of INR79 billion it expected has been paid and

net proceeds of US$1.06 billion have been received.

The company confirmed that it plans to pay up to $0.7bn of the proceeds to shareholders.

The payment by the Indian Government could allow Capricorn to draw a line under an affair that has absorbed lots of management time and involved protracted legal wranglings.

The dispute started after the Government of India imposed a retrospective tax bill on Cairn in 2014.

READ MORE: End of era for Edinburgh oil firm as it plans name change

It concerns events leading up to the flotation of Cairn’s former subsidiary in India in 2007 and a related initial public offering (IPO). The Indian business owns big finds made by the group under the leadership of Sir Bill Gammell, who founded Cairn in 1980 and was succeeded by current chief executive Simon Thomson in 2011.

The Government of India seized assets belonging to Cairn, which has always insisted it has paid all taxes due in the country.

The group had expected to receive $1.7 billion, including interest and costs after an international tribunal found in its favour in December 2020. It resorted to measures such as freezing properties in Paris owned by the government in order to try to enforce the tribunal award.

In September the group announced it had agreed a compromise under which it would get a refund of INR79bn.

READ MORE: Capricorn halts legal actions against Government of India

Mr Thomson said it had reached a pragmatic settlement that offered certainty in terms of returns and the ability to move the story on.

Cairn sold a majority stake in its former Indian business firm to Vedanta Resources for $5.5bn in 2011, and paid $3.5bn of the proceeds to shareholders. It has interests in a range of countries including the UK and Egypt.