28.5.14

Of Agusta Westland copters....

The defence ministry has scored a major legal victory against AgustaWestland in Italy and will be able to recover Rs.1,927 crore of the Rs.2,380 crore it had paid the Italian firm for supply of 12 VVIP helicopters.
After scrapping the deal, the ministry on January 1 decided to cash the three bank guarantees given by AgustaWestland through Deutsche Bank to recover its payments — around 45% of the total contract value of 556 million euros. Within days of the decision to cash the bank guarantees, AgustaWestland approached two former chief justices of India asking whether India would be legally entitled to cash the guarantees since it had part performed the contract by supplying three of the 12 helicopters.
Armed with these opinions, AgustaWestland moved an Italian court, which on March 17 restrained India from recovering the money from the firm, the UK-based subsidiary of Italian conglomerate Finmeccanica.
MoD appealed against this in a higher court in Italy which struck down the order restraining India from cashing the bank guarantees except the logical correction – the cost of the three helicopters to be deducted from the money to be recovered.
A three-judge bench headed by Laura Cosentini said in its order, “Considering that none of the guarantees was connected to a specific contractual obligation, that each was enforceable for any breach claimed by the ministry of defence, and that to support the enforcement evidence was brought of criminally relevant facts, we believe that the enforcement (cashing of bank guarantee) was fully legitimate.”

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