Vodafone to begin arbitration in tax row

10th May 2014 | By Mouseworld Now Correspondent |

Vodafone-logoNEW DELHI,  May 10, 2014: After the failure of conciliation talks between the Indian government and Vodafone over a Rs 20,000 crore tax dispute, the British telecom giant has decided to serve an arbitration notice to the Indian government. This shuts out the possibility of a resolution through talks.

The Indian government had decided to withdraw its conciliation offer.  The conciliation offer was made to Vodafone for settling the tax demand that arose from its 2007 acquisition of Hutchison Whampoa’s stake in Hutchison Essar. “Vodafone confirms that Vodafone International Holdings BV (VIHBV) has commenced an international investment arbitration against the Indian government under the Bilateral Investment Treaty (BIT) between India and the Netherlands,” said a Vodafone Plc spokesperson in a statement.

“Since Vodafone and the Indian government have been unable to find an amicable means of resolving the dispute, Vodafone has commenced an international investment arbitration as a way to achieve resolution,” added the company spokesperson.

Vodafone’s arbitration notice was served on April 17. Vodafone may opt for London as the venue for pursuing the case.

According to agency reports, the Indian finance ministry had already moved a Cabinet note for withdrawal of the non-binding conciliation offer it had made to Vodafone in June last year. The telecom company has been given two months for response. Now the arbitration would have to be handled by the new government, which takes charge after the general elections after 16th May.

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