HC halts 2nd Vodafone arbitration in Rs 11,000-cr tax demand against India
The Delhi High Court on Tuesday restricted the Vodafone Group’s arbitration proceedings against India under a treaty with the UK in connection with a tax claim of Rs 11,000 crore against the company in connection with its Hutchinson Telecom loan $ 11 billion.
Manmohan J. prevented Vodafone or its subsidiaries from proceeding with arbitration under the Bilateral Investment Protection Agreement between India and the United Kingdom (BIPA) as the contracted telecommunications group Similar proceedings on the same issue under the India-Netherlands BIPA .
“In the present case, there is a duplication of parts and problems.” In fact, the reparation requested by the defendants under BIPA India-UK and by Vodafone International Holdings BV (VIHBV), the defendants’ subsidiary ( group Vodafone) under BIPA India-Netherlands are virtually identical.
“At first glance, this Court would be unfair, unjust and unfair to allow the defendants to pursue foreign arbitration,” the court said in an interim order.
He also notified Vodafone and requested its response by October 26 at the central government’s request for a permanent injunction against major telecommunications to proceed with arbitration under the India-UK BIPA.
In its provisional order, the court was also originally “India is the natural forum for the dispute of the claim of the defendants (Vodafone and its subsidiaries) against the applicant (center).”
The court noted that the government considered that the acquisition of 11 billion Hutchinson Telecommunications International Limited (HTIL) at Hutchinson Essar Limited (HEL) by Vodafone was sentenced to a tax deduction at source (TDS) under the Tax Law the rent.
As Vodafone did not deduct the tax at the source, the government had raised Rs 11,000 crore request which was subsequently overturned by the Supreme Court on January 20, 2012, declared the Supreme Court.
Subsequently, the government made a retrospective amendment to the Income Tax Law that reassigned the responsibilities to Vodafone, the order of the High Court was noted.
Affected by the imposition of the tax, HIVBV invoked the arbitration clause under BIPA between India and the Netherlands by a dispute notice on April 17, 2012 and a notice of arbitration of April 17, 2014, Order of 10 pages.
While proceedings under the India-Netherlands BIPA were pending, Vodafone began arbitration under the India-UK BIPA on January 24 of this year.
Due to the second arbitration, the government, represented by Deputy Attorney General Sanjay Jain said that the two claims are based on the same cause of action and call for the same relief, but from two different courts constituted accordingly. investment against the host State itself.
ASG, assisted by the permanent central government lawyer, Sanjeev Narula, argued before that court that the arbitration procedure under the BIPA India in the United Kingdom was an abuse of the judicial process.
The government lawyer argued that disputes that include tax returns by a host state are beyond the scope of arbitration under the bilateral investment treaty, because taxation is a sovereign function and can not be agitated before a court Constitutional law of the host State.
They also argued that laws passed by Parliament can not be tried by an arbitral tribunal and are not the responsibility of BIPA or any other international treaty.