Has three weeks to appeal against Italian court’s order that bars encashment of Rs 2,360-cr guarantees
In a major setback to India in the VVIP chopper scam, an Italian court has barred it from encashing bank guarantees worth over Rs 2,360-crore as part of the penalties imposed after cancelling the Rs 3,600-crore deal with AgustaWestland.
India will file an appeal against the Italian court order issued on Monday and “will pursue all options,” Defence Ministry officials said here. They also said the Government is waiting for the full text of the court order and will take suitable action within the next few days. New Delhi has nearly three weeks to appeal, it was learnt and senior Defence Ministry officials are expected to rush to Rome.
The Defence Ministry has already encashed bank guarantees of around Rs 240-crore deposited in public sector banks in India even as it was yet to recover the bank guarantees deposited in banks of Italy.
An Italian court in Milan on Monday accepted a plea by AgustaWestland’s parent company Finmeccanica to stop India from encashing over Rs 2,360-crore (Euro 278 million).
The Italian court had put a stay on India’s effort to encash the bank guarantees in an earlier hearing on January 8.
“With this measure, the court granted the requests made by the companies of the Finmeccanica Group, recognising the manifestly abusive enforcement of the guarantees made by the Indian Defense Ministry, given the vagueness of the complaints made in relation to alleged breaches of contract,” Finmeccanica said in a statement.
“The Milan court has confirmed the ruling made last January, prohibiting...the payment of collateral of more than 278 million euros deposited in relation to the contract,” it said.
The Defence Ministry had cancelled the deal on January one 2014 following allegations of commission paid by UK-based AgustaWestland to some middlemen to bag the contract for 12 AW-101 helicopters for the IAF. The contract was signed in 2010.
The company had supplied three helicopters to the IAF till February last year and the delivery of remaining helicopters was put on hold after Defence Minister AK Antony asked the CBI to probe allegations of bribes.
He took this action following the arrest of Finmeccanica’s former CEO Giuseppe Orsi and AgustaWestland’s former chief Bruno Spagnolini by Italian authorities there last year. Subsequently, the CBI filed FIRs against 12 people and firms including former IAF chief SP Tyagi. After the cancellation of the contract, India also decided to go in for arbitration with the Anglo-Italian firm and the two sides have nominated their members in this regard.