A Chronological Analysis of Vodafone and Cairn - A BIT-ter Saga
- Aayushi Singh
In 2012, India’s retrospective taxation amendment culminated in an unfortunate torpedo of investment arbitrations against it, nestling India’s journey with bilateral investment treaties in unrest. India’s subsequent termination of BITs with multiple countries and conclusion of a protectionist model bilateral investment treaty also garnered critique. Retrospective taxation may be supported by State sovereignty, State practice and discretion however it becomes imperative to understand the nuances of individual investment arbitrations to appreciate the concerns of the investors and the state’s unfettered and almost unchecked power to frame and amend taxation laws. The paper chronologically appreciates the findings in Vodafone International Holdings v. Government of India and Cairn Energy Plc v. Republic of India – two landmark disputes, while trying to draw the common thread of retrospective taxation vis-à-vis violations of fair and equitable treatment/most-favoured nation clauses and other similar themes.
The paper attempts to critically analyse the Tribunal’s approaches in the disputes, while also balancing the concerns of the stakeholders involved and cementing a more reformed investment treaty regime in India.