News / Asia

India Agrees to Arbitration on Scrapped Helicopter Deal

FILE - Finmeccanica Chairman and Chief Executive Officer Giuseppe Orsi poses in a helicopter during the opening ceremony of the new Terminal of Vertiporto dell'Urbe in Rome on January 19, 2009. FILE - Finmeccanica Chairman and Chief Executive Officer Giuseppe Orsi poses in a helicopter during the opening ceremony of the new Terminal of Vertiporto dell'Urbe in Rome on January 19, 2009.
x
FILE - Finmeccanica Chairman and Chief Executive Officer Giuseppe Orsi poses in a helicopter during the opening ceremony of the new Terminal of Vertiporto dell'Urbe in Rome on January 19, 2009.
FILE - Finmeccanica Chairman and Chief Executive Officer Giuseppe Orsi poses in a helicopter during the opening ceremony of the new Terminal of Vertiporto dell'Urbe in Rome on January 19, 2009.
TEXT SIZE - +
Reuters
— India agreed to take its $770 million helicopter deal with Italian defense group Finmeccanica's AgustaWestland unit to arbitration while formally cancelling the agreement on Wednesday over what it termed a breach of integrity.

India's Defense Ministry appointed a former judge as its arbitrator on Wednesday but said in a statement it believed "integrity-related issues are not subject to arbitration''.

India froze payments for the 12 AW101 helicopters after Finmeccanica's then chief executive was arrested in February for allegedly paying bribes to secure the deal, embarrassing the New Delhi government before parliamentary elections due by May 2014.

India's defence minister, A.K. Anthony, has said he did not believe AgustaWestland's denial that it paid bribes to swing the deal. Anthony had a meeting with Indian Prime Minister Manmohan Singh hours before the latest decisions were announced.
      
Finmeccanica spokesman Roberto Alatri, commenting on India's decision, said the company would defend its position. It invoked the arbitration, which would be conducted in India under the Indian Arbitration and Conciliation Act of 1996.

"We've not received any official communication yet but we will do everything that would be necessary to defend the correctness of our position,'' Alatri said. "We're sure our behavior was ethically correct.''

India in October had issued a final "show cause'' notice to AgustaWestland seeking to terminate the contract. Sources told Reuters in November the deal would be scrapped.

"The Government of India has terminated with immediate effect the agreement that was signed with M/S. AugustaWestland International Ltd (AWIL) on 08 February, 2010 for the supply of 12 VVIP/VIP helicopters on grounds of breach of the Pre-contract Integrity Pact and the agreement by AWIL,'' the Defence Ministry said in its Wednesday statement.

Indian defense deals have been hit by a number of corruption allegations over the past two decades but a Defense Ministry spokesman said this was the first cancellation of a major deal.

Window for others

Paying or accepting bribes is prohibited by India's defence procurement rules. The government can cancel a contract if an integrity pact in the rules is violated, and the seller has to forfeit any security money it deposited as a bidder.

India's federal auditor said in August the ministry had initially stipulated that the helicopters should be able to fly to an altitude of 6,000 meters (19,685 feet), which meant that AgustaWestland could not compete since the AW101 was certified to fly only to 4,572 meters (15,000 feet).

India took delivery of three of the helicopters before the deal stalled but the Defense Ministry spokesman said the fate of those aircraft was "uncertain''.

United Technologies Corp's Sikorsky Aircraft, EADS'  Eurocopter and Lockheed Martin may now be in line to provide helicopters for the country's defense forces.

You May Like

Multimedia Anti-Keystone XL Protests Continue

Demonstrators are worried about pipeline's effect on climate change, their traditional way of life, health and safety More

Thailand's Political Power Struggle Continues

Court gave Prime Minister Yingluck Shinawatra until May 2 to prepare her defense over abuse of power charges but uncertainty remains over election timing More

Malaysia Plane Search Tests Limits of Ocean Mapping Technology

Expert tells VOA existing equipment’s maximum operating depth is around 6 kilometers as operation continues on ocean bed for any trace of MH370 More

This forum has been closed.
Comment Sorting
Comments
     
by: Jonathan huang from: Canada
January 02, 2014 2:53 PM
Every time when I compare Democratic India with "dictatorship" China, I got only one conclusion.
Whenever during an Olympic game, or space mission, or super computers, bullet trains........


by: Brama from: India
January 02, 2014 10:08 AM
India is hopelessly dysfunctional - we have to acknowledge it. We also must acknowledge that the Brits have taken many liberties with our kind tolerance and raped, robbed and abused us into the bargain. we shall never forget the corrupt influence of the Brits on our system of Government.


by: Jethmalani from: India
January 01, 2014 2:40 PM
India has always been for sale... the Gandhis are the source of corruption and disease... here we have Sonia Gandhi... an Italian parlor maid... who married one of the more corrupt of the stained family of reprobates... and spawned a slew of diseased organisms that now infect every facet of our political system...


by: Sharma Dharma from: India
January 01, 2014 12:26 PM
a corrupt organization of Brits and Kunts... India is not for sale..!! maybe you should consider selling your crappy piss pots to Pakistan or better yet, to Iran...
How come the US or Israel are never involved in corruption schemes to sell their military hardware? only the British with their inferior crap - my God - has Britain fallen so low...

In Response

by: Stanley from: UK
January 01, 2014 2:20 PM
Nobody denies that the US/Israel have superior technological and military advantages. But for the needs of India this was a good deal.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Pet Kangaroo Helps Spread Environmental Messagei
X
Penelope Poulou
April 22, 2014 5:53 PM
Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pet Kangaroo Helps Spread Environmental Message

Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pro-Russian Separatists Plan 'Federalization Referendum' in Eastern Ukraine

Pro-Russian separatists in eastern Ukraine say they plan to move forward next month with a referendum vote for greater autonomy, despite the Geneva agreement reached with Russia, the U.S. and Ukraine to end the political conflict. VOA's Brian Padden reports from the city of Donetsk in Eastern Ukraine.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video International Students Learn Film Production in World's Movie Capital

Hollywood - which is part of Los Angeles - is the movie capital of the world, and many aspiring filmmakers go there in hopes of breaking into the movie business. Mike O'Sullivan reports that regional universities are also a magnet for students who hope to become producers or directors.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid