A customer tests a smartphone as a logo hangs inside a Vodafone Group Plc retail store in London, U.K. (Photographer: Chris Ratcliffe/Bloomberg)

Vodafone Tax Case: Centre Knocks On Supreme Court’s Door Over Arbitrator

The Government of India today approached the Supreme Court against the Delhi High Court order that allowed parties in the Vodafone tax dispute matter to decide their arbitrators.

This is the second arbitration dispute between the Indian government and the U.K.-based telecom operator, initiated by the Centre over the appointment of presiding arbitrator.

The high court on Oct. 26 had allowed Vodafone Group to initiate arbitration proceedings against India under a treaty with the U.K. This was in connection with a Rs 11,000 crore tax demand raised against the company in relation to its $11 billion deal to acquire a stake in Hutchinson Telecom in 2007.

The arbitration case itself relates to the Vodafone retrospective tax case. In this, the Bombay High Court had held that Vodafone was liable to pay taxes in relation to the transactions with Hutchinson. The Supreme Court had, however, in 2012 held that Vodafone was not liable to pay taxes.

Subsequently, the then United Progressive Alliance government brought the Finance Bill clause with retrospective effect which once again made Vodafone liable to pay taxes, according to the government.