Vodafone invoked the first arbitration under the India- Netherlands BIPA through a notice of dispute of 17 April, 2012 and notice of arbitration of 17 April, 2014. Photo:  Bloomberg
Vodafone invoked the first arbitration under the India- Netherlands BIPA through a notice of dispute of 17 April, 2012 and notice of arbitration of 17 April, 2014. Photo: Bloomberg

Vodafone tells Delhi HC: it is willing to consolidate two arbitration proceedings

The Delhi HC was hearing the Indian government's plea against Vodafone's move to invoke the arbitration clause under the India-UK bilateral investment protection pact after it had already initiated proceedings under the India-Netherlands pact

New Delhi: Vodafone Group Plc. is willing to club together the two arbitration proceedings it has initiated against India if the arbitral tribunals seized of the matter agreed to do so, the telecom company told the Delhi high court on Monday.

Harish Salve, counsel for Vodafone, informed the court of the company’s stance.

The high court was hearing the Indian government’s plea against Vodafone’s move to invoke the arbitration clause under the India-UK bilateral investment protection agreement (BIPA) after it had already initiated proceedings under the India-Netherlands BIPA.

Vodafone moved the arbitral tribunals on the application of a retrospective amendment to the Income Tax Act which imposed a Rs11,000 crore tax liability on Vodafone in relation to its $11 billion deal acquisition of the entire 67% holding of CK Hutchison Holdings Ltd in Hutchison Essar Ltd in 2012.

Calling dispute resolution a ‘treaty obligation’ under public international law (PIL), Salve argued that whether Vodafone was entitled to protection against ‘unfair measures against investors’ under the two bilateral investment treaties would be decided by the arbitration tribunals constituted by virtue of the two treaties and no domestic court could restrain an aggrieved party from seeking such remedy under PIL.

“This is not abuse of process..if I have raised a bad claim, let the arbitrator decide. This court can only inquire whether there was an arbitration agreement or not," Salve said.

Vodafone invoked the first arbitration under the India- Netherlands BIPA through a notice of dispute of 17 April, 2012 and notice of arbitration of 17 April, 2014.

The second arbitration under the India-UK BIPA was invoked on 24 January, 2017. This second arbitration was stayed by the Delhi high court in August 2017 on the ground that both arbitral proceedings were on the same issue.

The Supreme Court on 15 December, 2017 had allowed Vodafone to appoint an arbitrator in the second arbitration but added that the proceedings would not start until completion of hearings in the case before the Delhi high court.

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