New Delhi: Abdulqawi Ahmed Yusuf of the International Court of Justice has been named as the neutral judge on the international arbitration panel looking into Vodafone's Rs 20,000-crore tax dispute with the Indian government over an eight-year-old acquisition.
Mr Yusuf, who is vice president of the ICJ, will join government arbitrator former chief justice of India R C Lahoti and Vodafone nominee Yves Fortier of Canada on a three-member panel constituted to resolve the issue.
Sources said that after Mr Yusuf confirms his participation, the arbitration proceedings will start - which have been pending for a year now.
The dispute is over tax liability arising out of Vodafone's 2007 purchase of Hutchison Whampoa Ltd's Indian assets.
The UK-based firm held that it owed no taxes because the acquisition of Hong Kong-based Hutchison's business was between two international companies, with the target asset registered in the Cayman Islands.
According to the Income Tax Department, Vodafone should have withheld part of the amount as tax while paying Hutchison. The issue went to the Supreme Court which in January 2012 said the deal was not taxable in India.
Government responded in 2012 with a law enabling it to retrospectively tax cross-border deals and such indirect transfer of shares going back to 1962. It also introduced a validation clause that made Vodafone liable to pay tax in India despite the apex court's judgement.
Vodafone in May last year abandoned conciliation talks and initiated arbitration proceedings against the government over the tax demand.
It faces a demand of over Rs 20,000 crore, of which Rs 8,000 crore is the tax due and the rest in interest and penalty.
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