Vodafone BIT Dispute: India’s Initial Response

In response to Vodafone filing a notice of dispute against India under the India-Netherlands BIT, here is India’s initial response as per a news report:

Referring to the recent threat of Vodafone to invoke bilateral investment treaty with the Netherlands on the tax issue, the official said the arbitration clause in the BIPA (Bilateral Investment Protection Agreement) cannot apply in Vodafone-Hutchison deal as it was signed in Cayman islands.

“The deal happened in Cayman islands and they are invoking India-Netherlands BIPA,” the finance ministry official said, adding “while in the Supreme Court Vodafone said that the deal happened outside India, under BIPA it is saying it has made substantial investment in India.”

Under the BIT, an “investment” for the purposes of jurisdiction of the arbitral tribunal exists if there an  “asset invested in accordance with the national laws and regulations of the Contracting Party in the territory of which the investment is made….” Article 1(a) also provides the usual inclusive listing of what constitutes “investment” for the purposes of the BIT.