Axiata obtains interim order from arbitration court in Ncell capital gains tax dispute

20 Dec 2019

Axiata Group has confirmed that the International Centre for Settlement of Investment Disputes has granted Axiata UK and Ncell, its Nepalese mobile operator, a Provisional Measures Order in the long-running capital gains tax wrangle. The tribunal has ordered that Nepal, its organs, agencies and officials, including the Large Taxpayers Office (LTPO) and the Inland Revenue Department (IRD), immediately be restrained from taking any steps to enforce or otherwise give effect to the demand letter served by the LTPO against Ncell dated 6 December 2019, in which the LTPO demanded that Ncell pay NPR22.4 billion (USD194.9 million) in outstanding CGT (including interest and penalties) in connection with Axiata’s acquisition of an 80% stake in the mobile operator from Sweden’s Telia Company in 2016. Axiata argues the imposition of the tax contravenes Nepal’s international legal obligations under the BIT bilateral investment treaty, and states it will seek remedies including the restitution of sums already paid, a permanent injunction against any further attempts to collect the CGT, as well as damages for all losses suffered as a consequence of ‘Nepal’s unlawful conduct’. It is not known when the court will issue a final ruling in the case.

Nepal, Axiata, Ncell Axiata