The Union Government on 12 July 2015 appointed international lawyer Rodrigo Oreamuno to arbitrate with the UK telecom major Vodafone in the 20000 crore rupees tax case on its behalf. Oreamuno replaces former Chief Justice of India RC Lahoti, who recused himself in May 2015.
Vodafone already named Yves Fortier of Canada as its nominee on the panel. Now, Oreamuno and Fortier would name a third arbitrator, who will act as a chairman of the tribunal for the case.
The Union Government and Vodafone had earlier decided to appoint Abdulqawi Ahmed Yusuf of the International Court of Justice as the third arbitrator. However, he declined to be part of the three-member panel in June 2015.
Background
According to the Indian government, the tax liability on Vodafone is 20000 crore rupees. The said tax liability of Vodafone in India arose from the purchase of Hutch Essar in 2007 for 11 billion US dollar, as it involved cross-border transfer of Indian assets. Although, the basic tax demand were 7990 crore rupees.
In June 2013, the Cabinet approved the conciliation with Vodafone to resolve the capital gains tax dispute related to its 2007 purchase of Hutch Essar for 11 billion dollars.
Earlier in May 2014, India withdrew a conciliation offer to Vodafone on the issue saying the telecom major had initiated arbitration without waiting for the Income Tax Appellate Tribunal decision on another transfer pricing dispute.
The UPA-II Government led by former PM Manmohan Singh wanted the transfer pricing dispute to be settled first so that conciliation talks with Vodafone on the Hutchison Essar deal could go ahead.
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