Italian court allows partial encashment of AgustaWestland bank guarantees

An Italian appellate court has allowed the partial encashment of bank guarantees and performance bonds, worth about Rs.1,818 crore, deposited by AgustaWestland in connection with the supply of 12 VVIP choppers to India. The Defence Ministry scrapped the deal in January this year following allegations that the company hired middlemen and offered bribes to bag the contract.

“The court in its judgment on Friday has substantially upheld the claims of the Government of India against AgustaWestland, A.W. SpA and Deutsche Bank, Italy, on encashment of bank guarantees and performance bonds in the VVIP helicopter case. The court also ordered AgustaWestland and A.W. Spa to reimburse legal costs to the Government of India,” said an Indian Defence Ministry statement.

The Defence Ministry is studying the order and “will take immediate steps to recover the amounts fully”.

The Rs.3,700-crore deal was terminated on January 1, after which the Defence Ministry initiated efforts to encash bank guarantees and penalties to the tune of Rs.5,470 crore. The amounts deposited by AgustaWestland with the Indian banks have already been claimed.

In a press statement, AgustaWestland’s parent company Finmeccanica said: “The Court of Milan partially upheld the complaint lodged by the Indian Ministry of Defence and thereby revoked the order issued by the judge on March 17 on seeking of emergency interim lodged by AgustaWestland to resist the calling of certain first-demand bank guarantees provided with reference to the contract for the supply of 12 helicopters.”

The company said AgustaWestland would assert its rights to recover the amounts being as directed by the court in the arbitration process, which has already initiated.

For its part, the Central Bureau of Investigation is also probing the allegations that the company had bribed some public servants through middlemen in the garb of engineering contracts to bag the deal.

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Printable version | Sep 28, 2020 9:06:19 AM |

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