The Delhi High Court today sought the response of telecom major Vodafone on the Centre’s plea against the international arbitration the company has initiated against India under the India-UK Bilateral Investment Protection Agreement (BIPA) in connection with a tax demand of Rs 11,000 crore. The central government has appealed against a single judge order of May 7 dismissing its plea against the international arbitration initiated by Vodafone. A bench of Justices Siddharth Mridul and Vinod Goel issued notice to Vodafone and sought its reply by July 5 to the government’s appeal.
The court did not pass any other order after Vodafone orally assured that nothing will happen till middle of July in the international arbitration. As part of its oral assurance, the company also told the court it will not sign the terms of reference (TOR) regarding the arbitration. In its appeal, the Centre has challenged the decision of the single judge permitting consolidation of two international arbitrations initiated by the company against India under the India-Netherlands and India-UK BIPA. Vodafone had initiated the arbitration proceedings under the India-UK and India-Netherlands BIPA in connection with the tax demand raised against it in relation to its USD 11 billion deal to acquire the stake of Hutchison Telecom.
While proceedings under the India-Netherlands BIPA were pending, the telecom major initiated a second arbitration under India-UK BIPA as well on January 24, 2017. The Centre had contended before the single judge that the Vodafone Group had abused the process of law by initiating two international arbitrations. The single judge, while dismissing the Centre’s plea, had given it liberty to raise the issue of ‘abuse of process’ before the consolidated India-UK BIPA tribunal.
He had said the Centre was a party to the BIPA, a treaty between two sovereign governments (of the United Kingdom and India). The obligations under such treaties were not subject to domestic laws and disputes arising out of them were not subject to the jurisdiction of the national courts, the judge had observed.