"Our arbitrator and Vodafone have mutually agreed to extend deadline for appointment of third arbitrator," a top government official said.

The last date for finalising the name of third arbitrator in the Vodafone case dispute is September 17.

Following arbitration notice by Vodafone in the Rs 20,000 crore tax case, the government had appointed former Chief Justice of India RC Lahoti as its arbitrator.

Vodafone's arbitrator is Canadian lawyer Yves Fortier.

Recently, the government has appointed New York-based law firm Curtis, Mallet-Prevost, Colt & Mosle as its counsel in the Vodafone tax arbitration case.

Vodafone International Holdings BV in April had served arbitration notice under the Bilateral Investment Protection and Promotion Agreement (BIPA) between India and the Netherlands for resolving the dispute.

The case pertains to capital gains tax dispute related to the acquisition of Hutchison Whampoa's stake in Hutchison Essar by British telecom giant Vodafone in 2007.

Although the Vodafone won the tax case in the Supreme Court, the then UPA government amended the tax laws with retrospective effect to recover the dues.

While the basic tax demand was Rs 7,990 crore, the total outstanding, including interest and penalty, is estimated to have risen to Rs 20,000 crore.

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