Key Points:
- Vodafone won the arbitration case worth arounf ₹20,000 crore against the Indian Government
- The government now has to pay ₹40 crore to the company as partial compensation for its legal costs
- Vodafone filed the case in the year 2014
Vodafone, the Telecom giant on Friday won a momentous ruling against the Indian government in an international court around ₹ 20,000 crore in dues which it had described as unjust.
(What is an Arbitration Case?
Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court. ~ Google)
Vodafone was represented by senior counsel Harish Salve and a team of DMD Advocates. The Indian government’s imposition of tax accountability on Vodafone is breaking the investment treaty agreement between India and the Netherlands, ruled international arbitration tribunal in The Hague.
The government must end the lookout for the dues from Vodafone and should also pay over ₹ 40 crore to the company as partial compensation for its legal costs, said Tribunal in its ruling.
Anuradha Dutt, managing partner of DMD Advocates was happy that the giant – Vodafone, got justice. The Indian Government will have to pay about ₹ 40 crore which is 60 per cent of the tribunal’s administrative cost while the rest 40 per cent would be borne by Vodafone.
Vodafone’s hold of the Indian mobile assets from Hutchison Whampoa in 2007 is the root of the tax dispute involving ₹ 12,000 crore in interest and ₹ 7,900 crore in penalties.
In 2012, India’s top court ruled in favour of the telecom provider but the government later that year changed the rules to enable it to tax deals that had already been concluded. In April 2014, Vodafone initiated arbitration proceedings against India.
Vodafone currently owns a 45.1% stake in Vodafone Idea, India’s third largest mobile operator.
