The arbitrators of Vodafone India and the Indian government have decided to engage into discussion and finalise the mechanism for selection of the third arbitrator for the Vodafone?s Rs 200 billion tax dispute. Once the mechanism is agreed by both the parties, which will include listing of select arbitrators, the two arbitrators will decide on the candidate. Both sides will also decide on the place of arbitration that will be in a neutral international location.
In the event the two parties are unable to reach some understanding on the third arbitrator, the two arbitrators will take a call on the issue themselves. The last date to resolve the issue has been decided as September 15.
Vodafone filed for international arbitration under the India-Netherlands bilateral investment promotion and protection agreement, after the government had decided to withdraw its conciliation offer with the company. The government had withdrawn its conciliatory offer after the company sought clubbing of pending tax dispute related to transfer pricing with the case of acquisition of Hutchison Essar.
