Two of Axiata’s subsidiaries have requested arbitration from the International Centre for the Settlement of Investment Disputes over a tax bill relating to the group’s acquisition of the Nepali operator Ncell.
Together with Axiata Investments (UK), Ncell is taking its case against Nepal’s Large Taxpayers Office (LTPO) to the country’s Supreme Court. The LPTO ordered the operator to pay a tax bill of NPR39.06 billion ($348 million) by 22nd April following the acquisition, but Ncell has contested the amount.
The promotion and protection of investments in the UK and Nepal is covered by a bilateral treaty between the governments of the two countries. Axiata Investments (UK) and Ncell argue that Nepal’s tax authority has acted “in contravention of its international law obligations under the bilateral investment treaty”.
The Supreme Court has acted on Axiata’s petition by hitting the Inland Revenue Department, LPTO and Ministry of Finance with a show cause order, as well as a temporary stay order that will prevent them from taking any further action against Ncell before a hearing currently scheduled for 6th May.
