NEWBURY (dpa-AFX) - Vodafone Group Plc (VOD, VOD.L) served the Indian government with a Notice of Dispute relating to the proposals in the Indian Finance Bill 2012 that violate the international legal protections granted to Vodafone and other international investors in India. The Notice, served by the group's Dutch unit Vodafone International Holdings BV or 'VIHBV', is the first step required before the beggining of international arbitration under the Bilateral Investment Treaty or 'BIT' between India and the Netherlands.
The dispute arises from the retrospective tax legislation proposed by the Indian government which, if enacted, would have serious consequences for a wide range of Indian and international businesses, as well as direct and negative consequences for Vodafone. According to the BIT, the Indian government is obliged to accord fair and equitable treatment to investors; provide full protection and security; not breach the legitimate expectations of investors in making investments; not deny justice or breach previously provided assurances; and not take steps to indirectly expropriate the investment.
Vodafone believes that the retrospective tax proposals amount to a denial of justice and a breach of the Indian government's obligations under the BIT to accord fair and equitable treatment to investors. The Indian government's retrospective tax proposals have also raised significant and widespread concern within India and worldwide and have been criticised by businesses and industry bodies representing over 250,000 companies across the US, Europe and Asia.
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© 2012 AFX News
