A freeze on Nokia's Indian assets has been repealed by a high court in Delhi, removing a significant stumbling block to the €5.4bn sale of the company's devices and services unit to Microsoft.
Nokia's assets in the country, including its Chennai manufacturing plant, have been frozen by the Indian government since September in a move by authorities to prevent the company walking away from a dispute over a massive tax bill.
Consequently, Nokia this week appealed to India's High Court to lift the freeze, and offered Indian authorities a €270m deposit until the case is resolved to get the assets freed up.
According to Reuters, the Delhi High Court on Thursday granted the appeal on the condition that the sum in question be placed in an escrow account.
"Our current understanding is that this decision allows for the transfer of the assets. However, Nokia has been asked to meet a number of conditions in the ruling, and still needs to provide the authorities with additional documentation. Nokia expects these conditions to be in line with international treaties and practices," Noklia said in a statement.
"The company will now start to prepare for the planned transfer of the assets, but notes that there are still a number of statutory clearances that remain before the assets can transfer. Nokia repeats its call for the Indian government to work with urgency to facilitate the other approvals needed for the transfer and secure employment for the tens of thousands of employees involved."
The decision comes as Microsoft and Nokia work towards closing the acquisition during the first quarter of 2014.
Nokia is still far from being cleared of its tax troubles in India. Claims surfaced this week that in fact it owes the Indian tax authority over $3bn — 10 times the amount it had originally been said to owe.
Nokia has denied being served a claim for the larger figure, which appears to be a speculative amount at this stage, although with some grounding.
The current claim of 20.8bn rupees (around $330m) covers five fiscal years starting from 2006-07. However, Reuters reports, a lawyer representing India's tax department said that Nokia could face an additional 75bn rupee liability for further years that tax authorities have yet to assess. The company could face a total bill of up to 210bn rupees ($3.4bn), according to reports.
Indian authorities claim Nokia's subsidiary in the country owes the money after allegedly not deducting tax from payments made to Nokia in Finland for software installed Indian-made phones.