Foreign companies are bracing themselves this week for a Mumbai High Court hearing in a case that could determine the future viability of mergers and acquisitions by offshore groups of Indian assets.

In the case, which will begin on Tuesday and last for five days, Indian tax authorities will argue that Vodafone, the UK-based mobile phone group headed by Arun Sarin, is liable for an estimated $2bn in taxes on its $11bn acquisition of local operator, Hutchison Essar, last year.