Lawgic Simplified

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 t...

In the wake of India's prolonged refusal to abide by the arbitration award according to which India has to pay $1.2 billion in damages, plus interest and costs to Cairn Energy, A French court has reportedly granted permission to Cairn to freeze a number of India-owned assets in Paris towards the settlement of the international arbitration award.   The said order of the French court entitles Cairn to take over 20 properties of the Indian government. Following India's refusal to go by the award and its appeal against the award, Cairn had moved courts in 9 countries including the US, and the UK, for enforcement of the arbitral award.  The dispute with Cairn had begun pursuant to Indian government's demand of Rs. 10,200 crore towards capital gains tax along with interest and penalty for an asset restructuring at the Cairn's India arm in 2006, ahead of the listing of its shares in 2007. On March 5, the Finance Minister had signaled that India would prefer an appeal against t...