Skadden, Arps, Slate, Meagher & Flom and DMD Advocates have successfully advised telecommunications company Vodafone Group in an international arbitration case against the Indian government over a $2 billion tax claim.
The Indian government was represented by U.S. firm Curtis Mallet-Prevost Colt & Mosle.
Quoting two sources, Reuters reported the tribunal ruled that India’s imposition of tax liability on Vodafone were in a breach of an investment treaty between India and the Netherlands.
The dispute has its roots in 2007 after Vodafone signed a $11 billion deal to buy the Indian mobile assets from Hutchison Whampoa. The government said Vodafone was liable to pay taxes on the acquisition, which the company contested.
According to reports, the then-government introduced retrospective amendments to Indian income tax law to allow it to continue raising its tax demand, despite a Supreme Court order in 2012 that brought relief to Vodafone.
In 2014, Vodafone initiated arbitration proceedings against India arguing that the government violated the principles of equitable and fair treatment under the investment treaty, Reuters added.
In a statement, Vodafone said, “The tribunal held that any attempt by India to enforce the tax demand would be a violation of India’s international law obligations.”
Meanwhile, the Indian government said that it would be carefully studying the award and all its aspects. “The Government will consider all options and take a decision on further course of action including legal remedies before appropriate fora,” a statement from the Ministry of Finance said.
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