HC halts 2nd Vodafone arbitration in Rs 11,000-cr tax demand against India

The Delhi High Court on Tuesday restrained Vodafone Group's arbitration proceeding against India, under a treaty with the United Kingdom, in connection with a Rs 11,000 crore tax demand raised against the company in relation to its $11 billion deal acquiring stake of Hutchinson Telecom.

Justice Manmohan restrained Vodafone or its subsidiaries from going ahead with arbitration under the India-UK Bilateral Investment Protection Agreement (BIPA) as the telecom major had initiated similar proceedings on the same issue under the the India-Netherlands BIPA.

"This court is of the prima facie view that in the present case, there is duplication of the parties and the issues. In fact, the reliefs sought by the defendants under the India-UK BIPA and by the Vodafone International Holdings BV (VIHBV), the subsidiary of defendants (Vodafone group), under the India-Netherlands BIPA are virtually identical.

"This court is further of the prima facie view that there is a risk of parallel proceedings and inconsistent decisions by two separate arbitral tribunals in the present case. In the prima facie opinion of this Court, it would be inequitable, unfair and unjust to permit the defendants to prosecute the foreign arbitration," the court said in an interim order.

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