Legal Fight Looms Over India’s Troubled AW101 Acquisition
AIN DEFENSE PERSPECTIVE » OCTOBER 18, 2013
The Indian government appears poised to cancel its scandal-tainted contract for 12 AgustaWestland AW101 executive helicopters. (Photo: AgustaWestland)
October 18, 2013, 11:15 AM
India’s attorney general, Goolamhussein Essaji Vahanvati, ruled last week that AgustaWestland breached contractual obligations and an associated “integrity pact” in winning a $787 million contract to supply 12 AW101 VIPhelicopters to the Indian Air Force (IAF) in 2010, raising the possibility the government will cancel the deal. AgustaWestland and parent company Finmeccanica have continued to deny any wrongdoing and on October 4 the Italian manufacturer formally requested arbitration over the stalled contract. In a written statement AgustaWestland said, “We have no further information compared to what [has been] published by the press. We have not received any Show Cause Notice for the contract cancellation. We have recently launched an arbitration process on contract suspension.”
The uncertainty surrounding the helicopter purchase has raised concerns that India’s military could be disadvantaged by possible legal wrangling, which seems likely to delay the procurement. Also, if the Indian government prohibits AgustaWestland from competing for other contracts, it could find itself having to accept a single-vendor framework for future procurements. “This is not just an internal matter but an international one that has geopolitical ramifications,” a senior Ministry of Defense (MoD) official, speaking on condition of anonymity, told AIN.
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