Six cases that could help decide if India is investment friendly

Deutsche Telekom vs. India

damages unknown as yet.

In 2007, Deutsche Telekom indirectly purchased 19.62% share in Devas Multimedia through a Singaporean subsidiary. In 2008, Devas Multimedia entered into a contract with Antrix, the commercial arm of the government-owned Indian Space Research Organisation, for leasing of transponders in the S-band spectrum on Indian satellites to provide broadband services to rural areas in India.
In 2011, in the wake of the 2G scame exposure, the Indian Cabinet Committee on Security refused an orbital position in the S-band for commercial activities. Subsequently, Antrix terminated the contract with Devas due to ‘force majeure’.  In 2013, Deutsche Telekom initiated investment arbitration against India (under the India-Germany BIT). The tribunal ruled in favour of Deutsche Telekom. India challenged the award before the Swiss courts, alleging that the BIT did not protect indirect investments such as existed in the instant case.
In December 2018, the Swiss Federal Supreme Court refused to set aside the award. The award has proceeded to the quantum stage and remains pending.

Antrix Corporation Ltd. vs Devas Multimedia Pvt. Ltd

damages: $672 million

This is linked to the Deutsche Telecom case referred to above.  Since Dewas was directly involved  — as part of the contract it had agreed to pay to Antrix a total of US$ 300 million over 12 years  —  it took Antrix and the Government to Geneva for arbitration, when its contact was cancelled.  The arbitration tribunal awarded Dewas $672 million.
The government challenged this but lost again. Simultaneously, charges of money laundering are filed against Devas under FEMA, besides accusing it of violating FIPB guidelines.
On 30 May, 2018, the Delhi High Court also reiterated that the arbitral award against India could not be stayed or waived.  The government refuses to do that.

India vs. Vodafone Plc. and others

damages unknown.

On April 17, 2014, Vodafone International Holdings BV (VIHBV) – a Dutch subsidiary of Vodafone Group Plc.(UK) – initiated arbitration against the Republic of India under the India-Netherlands BIT and BIPA (Bilaternal Investment Protection Act).  It challenged retrospective income tax amendments which had brought VIHBV under the tax-liability net for acquisition of stake in an Indian company. The retrospective amendment was introduced by the Indian Parliament after the Supreme Court of India quashed the tax-demand made by Government of India against VIHBV.
On January 24, 2017, Vodafone Group Plc. (UK), the parent company of VIHBV, initiated arbitration against the Republic of India under the India-United Kingdom BIT. It challenged the same retrospective taxation measures of India. India filed a suit before the Delhi High Court seeking anti-arbitration injunction to restrain Vodafone Group Plc. from continuing arbitration proceedings.
In May 2018, the Delhi High Court dismissed the suit against Vodafone Group Plc (UK). However, the Court also ruled that the arbitration act does not apply to BIT arbitrations which has created concerns over enforcement of BIT awards in India.  The matter remains to be decided.

Nissan Motor Co. Ltd. vs. India

damages claimed $770 million

Nissan Motor acquired 70% of Renault Nissan Automotive India Private Limited, in Chennai. In 2008, Nissan signed an agreement with Tamil Nadu government for building a car plant. Nissan was promised VAT and CST incentives which remained unpaid by the state.
Nissan Motor initiated arbitration against India under the India-Japan EPA (Economic Partnership Agreement) seeking USD 770 Million as compensation for the unpaid incentives and damages due to delay.  In April 2019, a Singapore-seated arbitral tribunal rejected India’s objections.
India has challenged the award on jurisdiction before the Singapore International Commercial Courts.

India vs. Khaitan Holdings Mauritius Limited

Damages unknown

Khaitan Holdings Mauritius Limited had investments into Loop Telecom and Trading Limited in India which had a telecom licence from the government for 21 Unified Access Services (“UAS / 2G License”). In 2012, the 2G scam compelled by the Supreme Court to cancel its licence Loop approached TDSAT for refund of license fees. Its request was dismissed. Kaif Investments Limited (“Kaif Investments”) and Capital Global Limited (“CGL”) that held substantial interests in Loop issued a notice to India under the  the BIT (bilateral investment treaty. Thereafter, Kaif Investments merged with Khaitan Holdings.
Relying on its decision in Vodafone Plc. case, the Delhi High Court declined to grant the anti-arbitration injunction against India at the interim stage. It held that the tribunal has the power to determine whether Khaitan Holdings was a genuine investor in Loop. Accordingly, the Court decided not to interfere with the ongoing arbitral proceedings at this stage and ruled that anti-BIT arbitration injunctions should be granted only in rare and compelling circumstances.

Korea Western Power Co. vs. India

Damages estimated at 400 million

.In 2012, Korean Western Power Co. (KOWEPO), a South Korean state-owned utility, decided to invest in India in the natural gas sector based on investments invited by India. KOWEPO acquired approximately 40% stake in Pioneer Gas Power Plant Ltd. (PGPL) which operated a gas-based power project in the State of Maharashtra. India made a commitment to supply fuel for the project.
However, due to India’s failure to meet it’s commitment, KOWEPO issues a notice to India in 2018 seeking resolution within six months. In December 2019, KOWEPO issued a notice of arbitration to India India-South Korean BIT and the Comprehensive Economic Partnership Agreement (CEPA).. The notice is not public. The compensation claim is estimated to be about USD 400 million.