Will govt now challenge Vodafone award? It does so in most cases

While government officials maintain “the Award is under study by Indian authorities and its legal counsels who would seek suitable legal remedies at appropriate forums”, if the past is anything to go by, the award will be challenged.

Just last week, the Supreme Court turned down the government’s appeal against an arbitration that Vedanta-Videocon won – the two were awarded $476 million – way back in January 2011! The government also challenged the award in favour of Reliance Industries in the Panna-Mukta-Tapti case in 2016. Ditto for the award, in 2018, in favour of Reliance in the ONGC case where the latter had asked for $1.6 billion for the gas that it alleged Reliance had stolen from its field.

The $672-million award in favour of Devas – in its damages claim against Isro’s Antrix – has also been challenged. Indeed, the government has got so used to challenging arbitration awards, it even challenged the award in favour of Japanese firm DoCoMo even though it had no stake in the case, and the Tatas who lost the case were quite happy to pay up.

Unlike Vodafone that was not asked to pay up after the government slapped a tax case on it, the taxman confiscated $1 billion of Cairn Energy’s shares after it used the retrospective tax law on it; it also confiscated $400 million of dividend to be paid to Cairn. Cairn’s arbitration award will be out over the next few months. Unlike the Vodafone case, where there is no immediate outgo from the government, if it loses the Cairn case, it will have to pay $1.4 billion in damages.