An international arbitration court absolved Vodafone Group of liability for a huge tax bill slapped on it by the Indian government related to its entry into the country in 2007.
The case heard by the Hague-based Permanent Court of Arbitration is the culmination of a long-running row on tax costs stemming back to Dutch affiliate Vodafone International Holdings’ acquisition of operator Hutchison Essar (which later became Vodafone India).
After numerous demands for taxes running into billions of euros and several hearings in Indian courts related to the bill, the matter was eventually taken to the arbitration court in early 2019 under rules set out in a Netherlands-Indian investment treaty.
In a statement at the conclusion of the case Vodafone Group said: “Vodafone confirms that the investment treaty tribunal found in Vodafone’s favour. This was a unanimous decision, including India’s appointed arbitrator Rodrigo Oreamuno. The tribunal held that any attempt by India to enforce the tax demand would be a violation of India’s international law obligations.”
Bloomberg reported the case can be appealed by India in Singapore’s international court, with its sources stating the country’s authorities were considering all options “including legal remedies”.
If Vodafone was found liable, the bill would reportedly come in at as much as €3 billion. It is one of a number of tax-related disputes between Vodafone Group and authorities in India.