The Economic Times
English EditionEnglish Editionहिन्दी
| E-Paper
Search
+

    Armed with new legal counter, Centre ready to challenge Vodafone arbitral award

    Synopsis

    Tushar Mehta said India should explore a competent forum in Singapore and advised against approaching the Delhi HC or the SC. "From the award, it appears that the seat of arbitration is Singapore and prime facie the challenge may lie in the said arbitration before the municipal courts of Singapore," the SG suggested.

    Representative image
    (This story originally appeared in on Oct 27, 2020)
    Armed with an opinion from solicitor general Tushar Mehta that an arbitral tribunal cannot render a law passed by a sovereign Parliament ineffective, the Centre will soon challenge the Permanent Court of Arbitration award, which quashed the income tax department's demand of Rs 22,000 crore as tax, penalty and interest on Vodafone on the ground that India violated the bilateral investment treaty with the Netherlands by retrospectively amending the law.

    "The question of law — the power of an arbitral tribunal to virtually and substantially declare a parliamentary legislation of a competent Parliament of a sovereign nation to be non est and unenforceable — itself is an issue which needs to be challenged. I therefore, opine that the Union of India must challenge the said award and must file all available proceedings to challenge the award and/or to protect the interest of Union of India," Mehta said in his opinion.

    Voda quote


    Mehta said India should explore a competent forum in Singapore and advised against approaching the Delhi high court or the Supreme Court. "From the award, it appears that the seat of arbitration is Singapore and prime facie the challenge may lie in the said arbitration before the municipal courts of Singapore," the SG suggested.

    Two months after Vodafone won the taxation dispute in the SC in January 2012, the Centre had amended the tax laws retrospectively and, in 2013, it slapped the telecom giant with a tax demand of Rs 13,000 crore.

    Sources said India has to move fast to challenge the award in an appropriate forum keeping in mind the period of limitation that would be attached to the award. The SG suggested that the future course of action be charted in consultation with attorney general K K Venugopal.

    When the law ministry referred the SG's opinion to the AG and sought his view, Venugopal recused from the process saying he was "prohibited from advising the government in this case by the rules of conflict of interest".

    The AG, in his letter to the law ministry, said, "I was consulted by Vodafone International Holdings BV in regard to the same dispute much before I was appointed to the office of attorney general for India. My office records reveal that I had received a special retainer from the said company in April 2012 in relation to the very dispute."

    He said he had also advised the company through three more conferences for which he was paid additionally. "In the circumstances, therefore, I must express my inability to be involved in the case in any manner," the AG said.
    (Catch all the Business News, Breaking News Events and Latest News Updates on The Economic Times.)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Also Read

    38 Comments on this Story

    TRIBHUWAN RAJ BHANDARI28 days ago
    Mr. Rao, the irony of it all is that retrospective legislation may get trashed by the Supreme Court being bad in law and unconstitutional. Till the matter reaches that end public money will be continued to be wasted on frivolous foolish and counter productive litigation making us the laughing stock before all. Let sanity prevail over false sense of overarching sovereignty.
    Tara28 days ago
    Rules for Focused Success in a Distracted World
    amzn.to/37KK9Ql
    Nemani Hanumanta Rao29 days ago
    I fully agree with Bhandari Ji. Late Pranab bore vengeance against Vodafone and brought a legislation in Parliament to give "retrospective" effect, which very unethical, illegal, frivolous and bad in Law. Even now Modiji must interfere and stop this nonsense and mindless law.
    The Economic Times