Vodafone Group has won the arbitration case against the Indian tax department in an international court over the demand of Rs 200 billion in dues.

The international arbitration tribunal in The Hague ruled that the imposition of a tax liability along with interest and penalties on Vodafone by the Indian government was in violation of the investment treaty agreement between India and the Netherlands.

Further, the court has also ruled that the government should pay over Rs 400 million to Vodafone as partial compensation for its legal costs.

The tax dispute dates back to 2007 when Vodafone had acquired the Indian mobile assets from Hutchison Whampoa. Following this acquisition, the government had demanded that Vodafone pay taxes on the acquisition, which the company contested.

In 2012, the Supreme Court ruled in favour of the Vodafone Group, however, the government later that year amended the rules to enable it to tax deals that had already been concluded.

Following this, in April 2014, Vodafone initiated arbitration proceedings against India.