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Vodafone wins international arbitration against India in ₹14,200-crore tax dispute case

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The British telecom big moved the Hague-based International Court of Justice (ICJ) in 2016.

Vodafone Group Plc mentioned on Friday that it had gained an international arbitration case against the Indian authorities, ending one of the crucial high-profile disputes in the nation involving a $2 billion tax declare.

An international arbitration tribunal in The Hague dominated that India’s imposition of a tax legal responsibility on Vodafone, in addition to curiosity and penalties, have been in a breach of an funding treaty settlement between India and the Netherlands, two sources with direct data of the matter mentioned.

India had claimed a complete of ₹279 billion ($3.79 billion), together with about $2 billion in tax, in addition to curiosity and penalties, one of many sources mentioned.

The tribunal, in its ruling, mentioned the federal government’s demand is in breach of “fair and equitable treatment” and it should stop searching for the dues from Vodafone. It additionally directed India to pay 4.Three million kilos ($5.47 million) to the corporate as compensation for its authorized prices, one of many sources added.

Vodafone mentioned in an announcement the quantity of the award was confidential. Shares in the corporate’s India unit, Vodafone Idea , ended 13% greater on Friday.

“The tribunal held that any attempt by India to enforce the tax demand would be a violation of India’s international law obligations,” Vodafone mentioned in its assertion.

India’s Finance Ministry mentioned it might rigorously examine the award, along with its legal professionals. “After such consultations, the government will consider all options and take a decision on further course of action including legal remedies,” the Ministry mentioned in an announcement.

“Vodafone has finally got justice, first from the Indian Supreme Court and now from an international arbitral tribunal,” mentioned Anuradha Dutt, senior companion at DMD Advocates, an Indian regulation agency representing the corporate.

The ruling brings an finish to one of the crucial controversial disputes in India below international treaty agreements that it enters into with nations to guard international investments.

India is entangled in greater than a dozen such instances against corporations, together with Cairn Energy, over retrospective tax claims and cancellation of contracts. The exchequer may find yourself paying billions of {dollars} in damages if it loses.

To scale back future arbitration claims, India has ended such agreements with over 50 nations and is engaged on a brand new regulation to guard international traders by providing aid from doable coverage adjustments even because it upholds the proper to tax them, Reuters reported.

Vodafone’s tax dispute stems from its $11 billion deal to purchase the Indian cell property from Hutchison Whampoa in 2007. The authorities mentioned Vodafone was liable to pay taxes on the acquisition, which the corporate contested.

In 2012, India’s prime court docket dominated in favour of the telecom supplier however the authorities modified the foundations to allow it to tax offers that had already been concluded.

In 2014, Vodafone initiated arbitration proceedings against India.



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