Hearing of India's appeal against Vodafone arbitration award scheduled in September

By - Nuttida Doungwirote*

Indian Government has filed an appeal against a ruling of an international arbitration tribunal rendered on September 25th, 2020. The ruling states that India has breached “the guarantee of fair and equitable treatment” and therefore is obligated to reimburse Vodafone Group Plc for Rs 22,100 crore (£4,327,294.50)

Background of the dispute

In 2007, Hutchison Telecommunications International Limited, a Hong Kong entity (HTIL) sold its stock in Hutchison Essar Limited, an Indian company (HEL) to Vodafone International Holdings B.V., a Netherlands entity (Vodafone)

Under Section 195 of the Income Tax Act 1961, any person paying to a non-resident or a foreign company is obligated to deduct taxes at source. Vodafone, being a payer to a Hong Kong entity, must therefore comply with Section 195 of the Income Tax Act 1961. Vodafone did not comply and was sued by the Indian revenue authorities.

However, the Supreme Court of India held that stocks were excluded from the definition of a capital asset and therefore Section 195 of the Income Tax Act 1961 did not cover the sale of stock in question. Vodafone was not obligated to deduct the taxes at source.

Also Read - French court grants permission to Cairn Energy to seize 20 Indian government properties in Paris: Report.

After the judgement, Vodafone started an arbitration process against India under the India-Netherlands BIT. The Tribunal ruled in favor of Vodafone, ordering India to reimburse Rs 22,100 crore (£4,327,294.50) for the legal costs and arbitrator appointment borne by the Claimant. The reason given by the Tribunal is that by demanding retrospective payment, India had breached a fair and equitable treatment guaranteed by the India-Netherlands BIT.

Indian government has challenged this arbitral award before a Singapore Court as the arbitration was seated in Singapore. The hearing is scheduled in September 2021.

*Nuttida Doungwirote is a 4th year student pursuing LL.B. from Chulalongkorn University, Bangkok.

Comments

Patna High Court Declares Bihar’s Reservation Amendments Ultra Vires

In a landmark decision, the Patna High Court has invalidated the Bihar government's legislative attempt to increase reservations for backward classes. The court's ruling focused on procedural flaws and the absence of a robust empirical basis for the hike, sparking a debate on judicial intervention in affirmative action policies. Background and Rationale Behind Setting Aside Bihar Reservation Increase Law The Bihar government had proposed an increase in reservations to address socio-economic disparities faced by backward classes. However, the court found that the state failed to follow due process, which includes conducting a thorough empirical study to justify the policy change. This procedural oversight led to the court's decision to strike down the increase. The High Court emphasized the necessity of a data-driven approach for policy changes related to reservations. The ruling underscored that without solid empirical evidence, such policies could not be justified within...

Pune Porsche Crash: Father of Minor Granted Bail

Image Credit: tv9marathi A Pune court has granted bail to the minor’s father, Vishal Agarwal, who faced charges under the Juvenile Justice Act for neglect and endangering the child by allowing him to drive without a license and consume alcohol. Additionally, bar owners and managers were arrested for serving alcohol to minors. The father, already in custody for other related charges, was implicated in the alleged manipulation of his son’s blood samples and in a separate case of kidnapping his driver. Advocate Prashant Patil argued that Vishal Agarwal's arrest was unlawful, contending that the charges were non-cognizable offenses and required a notice under the Criminal Procedure Code. Mr. Patil also highlighted contradictions in police reports, where the minor was listed as the accused in one FIR and as a victim in another. Also Read: Delhi High Court Stays Delhi Chief Minister Arvind Kejriwal's Bail in Excise Policy Case Earlier Proceedings in the Pune Porsche Crash Inc...

Counsel's failure to argue written submissions is not a ground of review: Bombay High Court

By - Sameeksha Negi* The Bombay High Court has observed that “If Counsel has not urged a point, the fact that there were written submissions is immaterial if those written submissions were never in fact argued.” The Bench also added that “Counsel’s failure to argue written submissions is not a ground of review or, I dare say, even appeal. It is no ground to assail any order of any judge of any court.” The bench was hearing a review petition filed for seeking reinstatement of original arbitration petition on grounds some of which were never argued and others never pleaded and the said petition was filed after the original arbitration petition was fully argued, and then decided by pronouncement in open court. Also Read - The Pension Scheme for freedom fighters cannot be construed in a manner that the requirements prescribed are rendered a dead letter: Bombay HC According to Justice GS Patel allowing parties to take grounds in review pleas or in appeals that were not argued initi...

Lawgic Simplified

Search This Blog