Vodafone 2nd arbitration: SC allows appointment of chairman

Vodafone gets SC's nod to initiate second arbitration over $2 bn tax demand

Vodafone gets SC's nod to initiate second arbitration over $2 bn tax demand

India's top court on Thursday allowed Britain's Vodafone to initiate a second arbitration process under an India-UK investment pact over a long-running US$2 billion-plus tax dispute with New Delhi. Challenging the second arbitration, the government had said the two claims were based on the same cause of action and seek identical reliefs but from two different tribunals constituted under two different investment treaties against the same host state.

Prior on October 26, the Delhi High Court permitted the Vodafone Group to proceed with intervention procedures against India, under a settlement with the United Kingdom, regarding a Rs 11,000-crore assess request brought against the solidify in connection to its $11-billion deal for getting a stake in Hutchinson Telecom, which held the group's Indian resources.

The high court had on August 22 restrained Vodafone from participating in the arbitration initiated under the India-United Kingdom Bilateral Investment Protection Agreement (BIPA) in connection with the tax demand raised against the company in relation to its Dollars 11 billion deal acquiring the stake of Hutchinson Telecom. It also claimed that the Centre had not disclosed to the court an undertaking it had given to the International Court of Justice (ICJ) to appoint an arbitrator, which the Centre denied. The union government moved court claiming that laws passed by Parliament do not fall within the ambit of any worldwide treaty. When conciliation talks with the Centre failed, Vodafone International Holdings BV (VIHBV), a Vodafone Group subsidiary, invoked the arbitration clause under BIPA between India and Netherlands in April 2014.

The ASG, however, said he did not wish to delay the start of the process. The high court on October 26 had given the Centre time till November 17 to indicate whether it was amenable to re-scheduling of these proceedings after a final decision is given in the first arbitration.

"When the order was passed, they were not aggrieved part then, they in fact accepted that order and didn't file the appeal challenging the order".

Ruling for the company, it had set aside an earlier Bombay High Court order that had upheld the tax demand on account of the said acquisition.

Mr. Rohatgi said India actually did not have jurisdiction in the matter as there was an global pact and the plea of the Centre was in anticipation.

Refusing to interfere with Delhi High Court order, Justice Sikri asked Additional Solicitor General Maninder Singh, appearing for the government, as to what its grievance is.

After being informed that it is listed for January 8, it said it expected the hearing to take place before the single judge of the High Court on the scheduled date and pass the relevant order by January 10.