Vodafone retro tax: Delhi HC rejects Centre's plea against arbitrations

Vodafone has initiated arbitration proceedings under the India-United Kingdom and India-Netherlands Bilateral Investment Protection Agreement in connection with the tax demand raised against the firm

The Delhi High Court on Monday dismissed the Centre's plea challenging Vodafone's move to initiate two international arbitrations against India in connection with a tax demand of Rs 110 billion under a retrospective law of 2012.

Justice Manmohan said the Centre can approach the UK arbitration tribunal under the India-United Kingdom Bilateral Investment Protection Agreement (BIPA) for its grievance.

Vodafone has initiated arbitration proceedings under the India-United Kingdom and India-Netherlands Bilateral Investment Protection Agreement in connection with the tax demand raised against the company in relation to its $11 billion deal to acquire the stake of Hutchison Telecom.

While proceedings under the India-Netherlands BIPA were pending, the telecom major initiated second arbitration under India-UK BIPA as well on January 24, 2017.

The Centre had told the Delhi High Court that the Vodafone Group had abused the process of law by initiating two international arbitrations.

Challenging the second arbitration, the government had said the two claims were based on the same cause of action and they seek identical reliefs, but from two different tribunals constituted under two different investment treaties against the same host state.