India challenges arbitration ruling for Vodafone in Singapore

The Fact News Service

December 24

India has challenged in Singapore an international arbitration court’s verdict against it over a $2 billion tax claim involving Vodafone Group Plc, according to sources. This development comes after the government lost an international arbitration case against Vodafone in September over a $2 billion retrospective tax dispute.

The international arbitration tribunal at Hague had ruled that the Indian government’s imposition of a tax liability on Vodafone was in breach of the investment treaty agreement between India and the Netherlands.

The tribunal, in its ruling, had said the government must cease seeking dues from Vodafone and pay more than ₹ 40 crore to the company as partial compensation for its legal costs.

The tax dispute, which involves interest of ₹ 12,000 crore and ₹ 7,900 crore in penalties, stems from Vodafone’s acquisition of the Indian mobile assets from Hutchison Whampoa in 2007. The government said Vodafone was liable to pay taxes on the acquisition, which the company contested.

In 2012, India’s top court had ruled in favour of the telecom provider but the government changed the rules later that year enable it to tax deals that had already been concluded.

Vodafone initiated arbitration proceedings against India In April 2014.

More from this section