AgustaWestland invokes arbitration over chopper deal

NEW DELHI (Reuters) - AgustaWestland has invoked arbitration over a scandal-tainted deal to sell helicopters to the government, according to a statement on Friday from the unit of Italy's Finmeccanica.

In February, India froze payments on the 560 million euro contract to supply 12 helicopters after the deal became mired in allegations of bribery and the then-CEO of Finmeccanica was arrested by Italian police for allegedly paying bribes to secure the deal.

Italy and India are separately investigating allegations that AgustaWestland paid bribes to win the 2010 deal for the helicopters to be used by senior politicians.

AgustaWestland denies the allegations.

The company said in the statement, which was given exclusively to Reuters, that suspension of payment was not provided for under the terms of the contract and that the authorities had not responded to the company's requests for bilateral discussions since April.

"The need to resolve this issue has left AgustaWestland with no other option but to invoke arbitration; the next step prescribed by the contract. This is not a step we take lightly," it said.

India had taken delivery of three helicopters before the deal was stalled.

(Reporting by Anurag Kotoky; Editing by Tony Munroe)