Vodafone tax arbitration sees further delays

20 May 2015

Arbitration on Vodafone’s tax dispute with the Indian government is likely to be delayed as two of the three-member panel have quit, Live Mint writes, citing a statement from the UK-based group. The tribunal was to be made up of three members, two of which would be appointed by the Indian government and Vodafone, respectively, whilst a third would be mutually agreed upon by the two arbitrators and would act as chairman. Whilst Vodafone’s selected arbitrator remains on board, the Indian government’s appointee resigned this month, and the neutral judge, Abdulqawi Ahmed Yusuf of the International Court of Justice (ICJ) has declined to be part of the panel. In a statement Vodafone noted that: ‘There is now likely to be a delay in appointing the chairman pending the Indian government appointing a replacement for its party-appointed arbitrator.’ The UK-based group also pointed out that if there is no subsequent agreement on the appointment of a chairman, the ICJ will appoint a third arbitrator.

Vodafone is involved in a legal battle with the government over claims that it owes the state INR200 billion (USD3.13 billion) in relation to its USD11 billion acquisition of Hutchison Whampoa’s stake in Vodafone India in 2007. The Supreme Court ruled in favour of Vodafone in January 2012 but in May that year the government introduced new legislation that would allow it to tax the company retrospectively. The two parties have agreed to arbitration, although the process of selecting arbitrators has been drawn-out.

India, Vodafone Group, Vodafone India