Not acceding to Indian jurisdiction in tax case: Vodafone to HC

14/10/2017

new delhi: Vodafone Group on Friday told the Delhi High Court that it is not submitting to the jurisdiction of the courts here regarding the arbitration process initiated by it against India in connection with a tax demand of Rs 11,000 crore.
The company has initiated arbitration proceedings under the India-United Kingdom Bilateral Investment Protection Agreement (BIPA) in connection with the tax demand raised against the company in relation to its USD 11 billion deal acquiring the stake of Hutchinson Telecom.
The high court on August 22 had restrained the Vodafone Group's arbitration proceedings under the India-UK BIPA which was the company's second arbitration on the same issue.
Earlier the company had initiated a similar arbitration under the India-Netherlands BIPA on the same issue and that proceeding is still going on.
Senior advocate Harish Salve, appearing for the telecom major, today informed Justice Manmohan that the company in its response to the high court's August 22 notice has said it is not acceding to jurisdiction of Indian courts in the matter.
Salve also told the court that the Indian government had committed to appoint an arbitrator before the President of the International Court of Justice (ICJ), where the first arbitration is pending, but the fact was not disclosed here.
The central government, which has opposed the arbitration proceedings under the two BIPAs by moving a plea here, claimed that the company's response was not as per the Civil Procedure Code (CPC).
The court, however, said it would take up the matter on October 26, the date already fixed for the hearing, and asked both sides to file their written submissions by October 17.
The court also appointed an amicus curiae to assist it in the matter.
The court on August 22 had halted the second arbitration under India-UK BIPA, saying that since the reliefs sought in both proceedings were virtually identical, "there is a risk of parallel proceedings and inconsistent decisions by two separate arbitral tribunals in the present case".
In its interim order, the court had also said it was of the prima facie view that "India constitutes the natural forum for the litigation of the defendants' (Vodafone and its subsidiaries) claim against the plaintiff (Centre)".
The court had noted that the government was of the view that the USD 11 billion acquisition of stake of Hutchinson Telecommunications International Limited (HTIL) in Hutchinson Essar Limited (HEL) by Vodafone was liable for tax deduction at source (TDS) under the Income Tax Act.
As Vodafone had not deducted the tax at source, the government had raised the demand of Rs 11,000 crore which was subsequently quashed by the Supreme Court on January 20, 2012, the high court had said.

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