VVIP chopper controversy heading towards legal logjam

AgustaWestlandCBI is separately investigating corruption charges in the deal and has named both AgustaWestland and its parent company Finmeccanica in its FIR. (Reuters)

The VVIP chopper deal controversy seems to be heading towards a legal logjam with the Defence Ministry standing firm on its decision to cancel the contract even after meeting top executives of AgustaWestland who presented their case on Wednesday, and the Italian firm going ahead with the arbitration process that it invoked in October.

After failing to get an audience with the ministry for months, company officials met Joint Secretary and Acquisition Manager (Air) Upamanyu Chatterjee Wednesday, a week before the deadline of a cancellation notice by the ministry, which believes enough evidence exists of corrupt practices in the Rs 3,546 crore deal for 12 VVIP choppers that was signed in 2010.

Sources said the firm insisted that no wrongdoing was involved and the due process and rules were followed in the awarding and signing of the contract. The company has been asked to give its points in writing by the November 27 deadline.

Sources said there has been no change in MoD's stance after the meeting and it believes there are grounds for invoking the stringent integrity clause that can lead to cancellation.

The Italian firm, meanwhile, issued a statement saying it had taken the second step in the arbitration process by announcing former Supreme Court Judge B N Srikrishna as its nominee for the three-member arbitration Bench.

The arbitration process was claimed by AgustaWestland on the grounds that no payments had been made by the MoD for the deal since February this year on unsubstantiated grounds.

By nominating Srikrishna, the firm has show that it is firm on the arbitration line, indicating that it would not accept a unilateral cancellation notice by the ministry. South Block, on the other hand, is armed with the opinion of the nation's top legal officer, the Attorney General, who has said there is enough grounds to invoke the integrity pact. The CBI is separately investigating corruption charges in the deal and has named both AgustaWestland and its parent company Finmeccanica in its FIR. Sources said the ministry is of the opinion that the arbitration process does not stand as the contract is being cancelled on the basis of the violation of the integrity pact.

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