AgustaWestland wants arbitration

Peeved over the suspension of the '3,546 crore-deal by India for the procurement of 12 AW-101 helicopters for VVIP use, Italian-owned UK-based company Agusta Westland has now decided to resort to arbitration proceedings. “Arbitration proceedings would be conducted in India under the Indian Arbitration and Conciliation Act, 1996. Of the three arbitrators, one shall be nominated by the buyer and one by the seller. The third arbitrator shall be nominated by agreement of the parties,” sources in Agusta said, adding that “Agusta does not favour cancellation of the contract in any way”. The announcement came on the day when IAF chief Air Chief Marshal N.A.K. Browne reiterated that the agreement had been “frozen”. The agreement had earlier been “put on hold” by the Indian government after allegations surfaced in Italy that kickbacks may have been paid to secure the deal. Agusta has now said that the “unilateral” suspension of the contract by India is “a sanction not provided for under the contract”. Agusta said they were resorting to arbitration proceedings since there had been no response from the ministry of defence (MoD) to a request for bilateral discussions. India had earlier frozen further payments to Agusta. India has so far received three of the 12 helicopters as part of the deal that was inked in 2010. Meanwhile, IAF chief Air Chief Marshal N.A.K. Browne said that the Mi-8 helicopters — currently operated by the IAF to transport VVIPs — would be phased out by next year. Sources said that with the freezing of the Agusta deal, the IAF could be looking at an option to re-configure some of the modern Russian-origin Mi-17 V-5 helicopters for VVIP use. In a statement issued on Friday, Agusta said, “Following the suspension of the contract to supply AW101 VVIP helicopters to India a request was made to India’s ministry of defence by AgustaWestland in April 2013.”