AgustaWestland fights to keep graft-tainted Indian chopper deal

20th November 2013, Comments 0 comments

British helicopter-maker AgustaWestland sought arbitration Wednesday in a bid to salvage a $753-million chopper deal that was suspended over corruption allegations.

India suspended the contract to supply 12 luxury VIP helicopters earlier this year after Italian investigators began looking into accusations that AgustaWestland paid bribes to win the deal.

The firm said in a statement it had sought arbitration by a "well-known" Indian judge of "unimpeachable experience and reputation" to settle the disagreement.

It identified the judge as former Kerala state high court chief justice B.N. Srikrishna.

Arbitration is provided for under the deal contract between India and AgustaWestland, a unit of Italy's Finmeccanica.

India's defence ministry did not immediately respond to AgustaWestland's statement.

But a highly placed defence ministry official said AgustaWestland representatives met Indian officials earlier Wednesday.

"They will be asked to present their contentions in writing by November 26," the ministry official told AFP on condition of anonymity.

The meeting came amid media reports that the Indian government has already decided to cancel the deal, citing violations of a so-called "integrity pact" that must be signed by defence suppliers.

Italian prosecutors suspect kickbacks worth around 10 percent of the deal -- $67.6 million (50 million euros) -- were paid to Indian officials to swing it in favour of AgustaWestland, according to Italian media reports.

The Italian boss of Finmeccanica was arrested in February over the case and put on trial -- touching off a firestorm in India, where the Congress-led government has been battling a string of graft scandals ahead of elections next year.

Finmeccanica, said Wednesday it had received "no such communication" about cancellation of the order from the defence ministry and dismissed "all allegations of violation of the pre-contract integrity pact".

"Finmeccanica is confident in India's reputation for fair and transparent proceedings and respect for the rule of law, for which India has an established reputation," the company said in a statement.

"AgustaWestland will deliver the formal written response to the exceptions raised by India's MOD (Ministry of Defence)," the statement added.

Last month, India moved to cancel the contract by issuing a "final show cause notice" to the company, asking why action should not be taken against it for allegedly violating the terms of the integrity pact.

India signed the deal in 2010 for the dozen helicopters with AgustaWestland, which beat out competition from US, Russian and European rivals.

Any cancellation of the agreement could see the contract re-tendered and result in hefty losses for AgustaWestland.

India has already received three of the helicopters, but Defence Minister A.K. Antony halted deliveries of the remaining nine in February.

India's auditor general said in an August report that the defence ministry "deviated from procurement procedure and tender on several instances in the deal", including altitude requirements.

© 2013 AFP

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