1. Vodafone wins $2 bn tax case
International tribunal rules that India’s demand is in breach of ‘fair treatment’
- Vodafone Group Plc said on Friday that it had won an international arbitration case against the Indian government, ending one of the most high-profile disputes in the country involving a $2 billion tax claim.
- An international arbitration tribunal in The Hague ruled that India’s imposition of a tax liability on Vodafone, as well as interest and penalties, were in a breach of an investment treaty agreement between India and the Netherlands, two sources with direct knowledge of the matter said.
- India had claimed a total of ₹27,900 crore ($3.79 billion), including about $2 billion in tax, as well as interest and penalties, one of the sources said.
- The tribunal, in its ruling, said the government’s demand is in breach of “fair and equitable treatment” and it must cease seeking the dues from Vodafone. It also directed India to pay £4.3 million ($5.47 million) to the company as compensation for its legal costs.
- Vodafone said in a statement the amount of the award was confidential. Shares in the company’s India unit, Vodafone Idea, ended 13% higher on Friday.
- “The tribunal held that any attempt by India to enforce the tax demand would be a violation of India’s international law obligations,” Vodafone said in its statement.
- The Finance Ministry said it would carefully study the award, together with its lawyers. “After such consultations, the government will consider all options and take a decision on further course of action, including legal remedies,” the Ministry said in a statement.
- “Vodafone has finally got justice, first from the Indian Supreme Court and now from an international arbitral tribunal,” said Anuradha Dutt, senior partner at DMD Advocates, an Indian law firm representing the company.
- The ruling brings an end to one of the most controversial disputes in India under international treaty agreements that it enters into with countries to protect foreign investments.
- India is entangled in more than a dozen such cases against companies, including Cairn Energy, over retrospective tax claims and cancellation of contracts.
International Arbitration Tribunal
- It is an independent non-governmental panel of independent and impartial experts.
- It generally comprises of three members nominated by the Parties (or appointed by the International Arbitration Institution, or by a National Court) on the basis of their legal and practical expertise and knowledge, to render a final and binding award.
2.Habitat loss puts lion-tailed macaque on IUCN’s endangered list for sixth time
Their population is likely to decline by over 20% in the next 25 years: report
- The Lion-tailed macaque (Macaca silenus), a primate endemic to small and severely fragmented rainforests of the Western Ghats in Karnataka, Kerala and Tamil Nadu, continues to be in the ‘endangered’ category on the IUCN Red List of Threatened Species.
- The latest conservation status of the primate was updated in the IUCN database recently, based on technical reports over the years from a group of researchers, including Mewa Singh of University of Mysore, Ajith Kumar of the Centre for Wildlife Studies, and Honnavalli N. Kumara of the Salim Ali Centre for Ornithology and Natural History.
- According to a technical report, the total wild population of lion-tailed macaque could be about 4,000 individuals, consisting of less than 2,500 mature individuals, made up of 47 isolated sub-populations in seven locations in the three States. The population is expected to suffer a decline of over 20% in the next 25 years owing to varied reasons, including hunting, road kills and habitat loss, it said. Though the conservation status of lion-tailed macaque had improved from ‘endangered’ in the first assessment in 1990 to ‘vulnerable’ in 1994, its status has remained ‘endangered’ since 1996.
- The researchers have observed that the population of the mostly shy and frugivorous primate, which prefers upper canopies of evergreen rainforests, was registering a declining trend in its home range in the Western Ghats from the Kalakkad Hills in the south to Sirsi-Honnavara in the north at an altitude of 100-1,300 m.
- “Fragmentation of the habitat is one of the major threats to the species. Several habitats that remain disconnected from others can be linked. There are contiguous habitats in Karnataka and Kerala. The population in the Valparai plateau of the Anamalai Tiger Reserve (ATR) can also be linked to other populations. Enough research has been done on various aspects of the conservation of the primate over the last several years, and now it is the responsibility of the authorities to implement them on the ground,” says Professor Mewa Singh of the University of Mysore.
- Researchers feel that continuous monitoring is crucial to understanding the population trend for the management and protection of lion-tailed macaques in their habitat. Officials of the Anamalai Tiger Reserve are preparing to estimate the lion-tailed macaque population of Valparai in October in collaboration with the Nature Conservation Foundation.
The International Union for Conservation of Nature
- IUCN is a membership union uniquely composed of both government and civil society organisations.
- Created in 1948, it is the global authority on the status of the natural world and the measures needed to safeguard it.
- It is headquartered in Switzerland.
- The IUCN Red List of Threatened Species, is the world’s most comprehensive inventory of the global conservation status of plant and animal species.
- It uses a set of quantitative criteria to evaluate the extinction risk of species. These criteria are relevant to most species and all regions of the world.
- The IUCN Red List Categories define the extinction risk of species assessed. Nine categories extend from NE (Not Evaluated) to EX (Extinct). Critically Endangered (CR), Endangered (EN) and Vulnerable (VU) species are considered to be threatened with extinction.
- It is recognized as the most authoritative guide to the status of biological diversity.
- It is also a key indicator for the SDGs and Aichi Targets.
3. IRDAI lists LIC, GIC, New India as systemically important
As domestic SIIs, companies will be subject to enhanced regulatory supervision
- The Insurance Regulatory and Development Authority of India (IRDAI) has identified the Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC) and The New India Assurance Co. as Domestic Systemically Important Insurers (D-SIIs) for 2020-21.
- Given the nature of operations and their systemic importance, the regulator has asked the three public sector insurers to raise the level of corporate governance, identify all relevant risks and promote a sound risk management culture. As D-SIIs, they will also be subjected to enhanced regulatory supervision, IRDAI said in a statement.
Too big to fail
- D-SIIs refer to insurers of such size, market importance and domestic and global interconnectedness whose distress or failure would cause a significant dislocation in the domestic financial system. Their continued functioning is critical for the uninterrupted availability of insurance services to the national economy.
- D-SIIs are perceived as insurers that are too big or too important to fail. Such a perception and the expectation of government support may amplify risk taking, reduce market discipline, create competitive distortions and increase the possibility of distress in future. Thus, D-SIIs should be subjected to additional regulatory measures to deal with the systemic risks and moral hazard issues, IRDAI said.
- Size in terms of total revenue, including premium underwritten and the value of assets under management are among the parameters on which the insurers are identified. IRDAI said it will list D-SIIs on an annual basis.
Requirements for D-SIIs:
- The three public sector insurers have been asked to raise the level of corporate governance.
- Identify all relevant risks and promote a sound risk management culture.
- The D-SIIs will also be subjected to enhanced regulatory supervision of the IRDAI.
Domestic Systemically Important Insurers:
- D-SIIs are perceived as insurers that are ‘too big or too important to fail’ (TBTF).
- D-SIIs refer to insurers of such size, market importance and domestic and global interconnectedness whose distress or failure would cause a significant dislocation in the domestic financial system.
- Thus, the continued functioning of D-SIIs is critical for the uninterrupted availability of insurance services to the national economy.
Domestic Systemically Important Bank (D-SIBs)
- D-SIB means that the bank is too big to fail. According to the Reserve Bank of India (RBI), some banks become systemically important due to their size, cross-jurisdictional activities, complexity and lack of substitute and interconnection. Banks whose assets exceed 2% of GDP are considered part of this group.
- Presently, the State Bank of India (SBI), ICICI Bank, and HDFC Bank have been identified as DSIBs in India.
- Should such a bank fail, there would be significant disruption to the essential services they provide to the banking system and the overall economy.
- The too-big-to-fail tag also indicates that in case of distress, the government is expected to support these banks.
- Due to this perception, these banks enjoy certain advantages in funding. It also means that these banks have a different set of policy measures regarding systemic risks and moral hazard issues.