Vodafone Wins Rs 20,000 Crore Int’l Arbitration Case Against Govt

This comes days after SC allowed a period of 10 years for telecom companies to clear AGR-related dues.

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Vodafone Group Plc has won an international arbitration case against the Indian government involving a retrospective tax dispute amounting to Rs 20,000 crore, Reuters reported on Friday, 25 September, citing sources.

The telecommunications company had contended that the tax liability it was subjected to through retrospective amendments to the income tax law was in violation of principles of equitable and fair treatment under India-Netherlands investment treaty agreement, reported BloombergQuint.

Accepting the contention, the tribunal ruled in Vodafone's favour.

According to NDTV, the case involved Rs 12,000 crore in interest and Rs 7,900 crore in penalties.

What Vodafone had challenged was the government’s use of a 2012 legislation that gave it powers to retrospectively tax deals like the telecom company’s $11 billion acquisition of a 67 percent stake in Hutchison Whampoa in 2007, IANS reported.

What Has the Government Said?

Responding to the ruling, the government said that it will be "studying the award and all its aspects carefully in consultation with counsels."

"After such consultations, the government will consider all options and take a decision on further course of action, including legal remedies before appropriate fora,” a Press Information Bureau release said.

Comes After SC Relief in AGR Case

This ruling comes days after the Supreme Court, on 1 September, allowed a period of 10 years for telecom companies to clear adjusted gross revenue (AGR)-related dues.

Ten percent of the dues will have to be paid by 31 March 2021, with the extension granted in view of the COVID-19 situation, the court had said.

“Instalments to be paid by 7 February of every succeeding year. Any default will accrue interest and non-payment will also invite contempt of court proceedings,” it had added.

The development had come as a relief for Vodafone Idea Ltd, for which survival would have been a concern had the court not agreed to a staggered payment schedule.

(With inputs from Reuters, NDTV, IANS)