No arbitration in AgustaWestland deal: Antony

There is "no question" of arbitration in the Rs.3,727-crore deal with AgustaWestland for VVIP choppers, Defence Minister A.K. Antony said Monday, making clear government's opposition to the company's move for such a course.

"There is no question of arbitration," Antony told reporters here.

"A show-cause notice has been given, we are waiting for a response," Antony said.

Facing the threat of the deal being cancelled, AgustaWestland Nov 20 nominated retired Supreme Court Judge B.N. Srikrishna on its behalf for arbitration.

AgustaWestland officials, the same day, met defence ministry officials to present their case and are learnt to have conveyed there was no wrongdoing in the deal.

The ministry, earlier this month, extended by 15 days the deadline set for AgustaWestland, the Britain-based subsidiary of the Italian conglomerate Finmeccanica, to reply to the show-cause notice issued Oct 21 for cancelling the deal for supplying 12 AW-101 VVIP helicopters to the Indian Air Force (IAF).

Sources said the Anglo-Italian company was asked to give a written reply to the show-cause notice by Nov 26.

Defence ministry officials have maintained there was no cause for arbitration. They have said the company has been accused of violating the integrity pact.

Antony earlier accused the company of violating its contractual obligations.

While sources say a cancellation of the contract was likely, the ministry's final decision will be known after the company submits its written reply.

India concluded a contract with AgustaWestland in February 2010 for the 12 helicopters, three of which have already been delivered to the IAF.

However, following allegations of kickbacks against top officials of the Anglo-Italian firm, the contract for VVIP choppers was frozen.

The helicopters were for the IAF's elite Communication Squadron which ferries the president, the vice president, the prime minister and other VVIPs.

The Comptroller and Auditor General slammed the defence ministry and the IAF for deviations from procedures in procurement of the choppers.