Vodafone has commenced international arbitration over its long-running $2.36 billion tax battle with the Indian government.
The company has asked for the dispute to be taken to an international court, and the case could be heard by the end of the year, Bloombergreported.
In a media statement, Vodafone said it has resorted to international investment arbitration because the company and the Indian government “have been unable to find an amicable means of resolving the dispute.”
The tax dispute dates back to Vodafone's 2007 acquisition of its Indian unit from Hutchison. Indian tax officials demanded taxes on the acquisition, but Vodafone refused on the grounds that the transaction took place between two offshore entities.
In 2012 Vodafone won a supreme court verdict that Indian tax law did not cover the transaction. The government controversially responded by retroactively changing the law and serving Vodafone with a fresh demand.
Earlier this year Vodafone and the government entered conciliation talks, but the negotiations soon stalled.
According to Vodafone's most recent annual report, as of January 2013 Indian tax authorities claimed that the operator owed 142 billion rupees ($2.36 billion) in taxes, interest and penalties.