Italian judge rejects Indian bid to recover helicopter deal guarantees

[Daedalus]

An Italian judge has rejected a request by India to recover more than 278 million euros ($387 million) in bank guarantees backing a scrapped helicopter deal with Finmeccanica, the Italian defence group said on Monday.

India cancelled the 560 million-euro order with Finmeccanica unit AgustaWestland for 12 top-end helicopters in January, citing a breach of integrity relating to alleged corruption.

The ruling by a Milan court in favour of AgustaWestland, which is represented by Cleary Gottlieb Steen & Hamilton, confirms a temporary freeze decided by the same court in January.

The New Delhi government can still appeal against it.

"The Milan court has confirmed the ruling made last January, prohibiting... the payment of collateral of more than 278 million euros deposited in relation to the contract," Finmeccanica said in a statement.

Sources had earlier informed Reuters of the court decision.

The overall value of the guarantee scheme with Deutsche Bank SpA, Deutsche Bank AG, Intesa Sanpaolo and the State Bank of India was around 300 million euros.

India managed to cash in two bank guarantees worth 2.4 billion Indian rupees ($39 million) earlier this year.

Finmeccanica said the Milan court declared it had no jurisdiction over a 28 million euro warranty bond, part of the overall scheme, which it said had already been paid out by the State Bank of India and Deutsche Bank.

India froze payments for the contract after Finmeccanica's then Chairman Giuseppe Orsi was arrested in February last year for allegedly paying bribes to secure the deal, embarrassing the New Delhi government before parliamentary elections due by May.

Orsi and former AgustaWestland head Bruno Spagnolini, who have both denied allegations they paid bribes to middlemen to secure the deal, are being tried in the northern Italian city of Busto Arisizio.

The separate dispute over the contract, signed in 2010 by AgustaWestland International Ltd, the British unit of the helicopter company, will likely be a lengthy process.

New Delhi has agreed to AgustaWestland's calls for arbitration, which will take place in India and could take months or even years to complete. (Reporting by Danilo Masoni; Editing by Anthony Barker)

UPDATE 1-Italian judge rejects Indian bid to recover helicopter deal guarantees| Reuters

Saint lost $387 million hard earned tax payers money

 

[Sergi]

Saint lost $387 million hard earned tax payers money

How ????????

Do you even know what a BG is ???

 

[Daedalus]

How ????????

Do you even know what a BG is ???

You tell me.

 

[Sergi]

You tell me.

You said something about losing money !!!! Now you are not sure or what ???
I too don't like Saint. But blaming everything is not good too.
Simple google or wiki search will tell you about what BG is. Good luck

 

[Daedalus]

You said something about losing money !!!! Now you are not sure or what ???
I too don't like Saint. But blaming everything is not good too.
Simple google or wiki search will tell you about what BG is. Good luck

Exactly my thoughts. I think you are getting things mixed up buddy. Premature termination of the contract was who's decision?

@Sergi Read this

While reports about the government scrapping the deal surfaced soon after Defence Minister A.K. Antony met Prime Minister Manmohan Singh in the morning, the Defence Ministry confirmed the cancellation only around 5.30 p.m; it added that the arbitration route would be taken. Justice B.P. Jeevan Reddy will be the arbitrator for the Ministry.

India scraps VVIP chopper deal with AgustaWestland - The Hindu

 

[madooxno9]

Well BG is very complicated specially when it comes to 2 different countries.

One of the new trend is to involve 3rd party bank which means a bank in 3rd country. In this case India did not use 3rd and is facing trouble.

I guess we have only way that is to challenge this verdict at higher court or bring in International trade Arbitrary Court .

That what i studied in my LAW class

 

[Daedalus]

Well BG is very complicated specially when it comes to 2 different countries.

One of the new trend is to involve 3rd party bank which means a bank in 3rd country. In this case India did not use 3rd and is facing trouble.

I guess we have only way that is to challenge this verdict at higher court or bring in International trade Arbitrary Court .

That what i studied in my LAW class

The contract shouldn't have been terminated in the first place until the Italian's were proven guilty. Their is very slim chance of retrieving the money now, since the MoD decided to back out without any proof.

 

[dray]

How ????????

Do you even know what a BG is ???

I know what a BG is, and in this case we may lose the money if international court rules against us.

 

[axisofevil]

Indan govt is so fuking stupid..and corrupt.....these aren;t mistakes ...its done on purpose. Wake up you clueless morons....YOU ppl dont do shit....but yap all day and boast of our bs achievements...

 

[HRK]

India To Appeal Italian Court's Decision on Bank Guarantees Over Canceled Helo Contract | Defense News | defensenews.com

ROME AND NEW DELHI — An Italian court has rejected a bid by the Indian government to obtain €278 million (US $386 million) held as bank guarantees for Finmeccanica’s canceled sale of AW101 helicopters to India. India plans to appeal the ruling.

India canceled the contract in January after Italy put Finmeccanica’s former CEO on trial. Giuseppe Orsi is accused of taking part in a bid to offer bribes to Indian officials to win the contract for 12 AgustaWestland helicopters, worth €560 million. He was CEO of AgustaWestland at the time of the alleged wrongdoing, and has denied the charges.

India then sought to obtain the €306 million payment that Finmeccanica made to a group of banks at the outset of the contract, as a form of returnable guarantee to the Indian government.

In January, the Indian government was able to obtain a portion of the money — €27 million euros — which was held by an Indian bank.

But an Italian court initially blocked India from obtaining the rest of the money, which is held by European banks, and upheld that decision on Monday, Finmeccanica said in a statement.

“The Milan court has confirmed the ruling made last January, prohibiting ... the payment of collateral of more than €278 million deposited in relation to the contract,” Finmeccanica said in a statement.

On Tuesday, India’s Defence Ministry issued a statement saying it plans to appeal. “Simultaneously, the government will vigorously pursue all options for encashment of the bank guarantees,” it said.

An MoD official said even diplomatic pressure can be used to recover the money held in bank guarantees.

India is also carrying out its own criminal probe into the matter. India’s anti-fraud agency, Central Bureau of Investigation (CBI), is probing charges of corruption on grounds of breach of the Pre-contract Integrity Pact. Finmeccanica has sought arbitration in India.

 

[axisofevil]

Well good luck on Italy getting the two sailors who murdered innocent Indians freed! That is if we have a govt with a spine

 

[Sergi]

I know what a BG is, and in this case we may lose the money if international court rules against us.

I didnt asked you but its good thing though

BG is for customer ( India ) from the company to assure the committment to the contract and its terms. If compamy fail to keep the contaract the amount is cashed by customer.

Exactly my thoughts. I think you are getting things mixed up buddy. Premature termination of the contract was who's decision?

@Sergi Read this


India scraps VVIP chopper deal with AgustaWestland - The Hindu

He cant take decision alone. Even though i didn't like the termination that was the right thing to do.
And in no way it waste tax payers money. We already have cashed 2 BG's and rest will be settled in court and its likely to be going India's way as the breach of terms of contract.

 

[Thorough Pro]

You enter a deal, provide BG to show your seriousness/willingness, then you back-off from the deal, and now you want of BG back?

But again, it all depends on the agreement and conditions there in.

You tell me.

 

[Daedalus]

He cant take decision alone.

Even DK Joshi was not on the submarine when the batteries blew.

We already have cashed 2 BG's and rest will be settled in court and its likely to be going India's way as the breach of terms of contract.

It was illegal and against ones logic to terminate the contract before the joint team of the CBI, Ministry of Defence and External Affairs came to a conclusion on their investigation.
The money has been routed through Tunisia, they know the money trail but no names have figured out officially.
The important point here is that saint should have waited till the end of the investigation, and not tugged his lungi so early. Its a long battle ahead. Even if they managed to get the money back, it will be years from now.

BG is for customer ( India ) from the company to assure the committment to the contract and its terms. If compamy fail to keep the contaract the amount is cashed by customer.

Both the parties have to keep some money as BG, Its not just the seller as you think. India already encashed the 39 million that the company kept in the Indian bank. This battle is for the Indian money that GOI deposited in the Italian bank.

 

[dray]

I didnt asked you but its good thing though

BG is for customer ( India ) from the company to assure the committment to the contract and its terms. If compamy fail to keep the contaract the amount is cashed by customer.

Here India gave a BG to that company, it is like a booking amount or a guarantee of payment against the purchase order that India has placed with that company, if India fails to purchase the products as per the terms & conditions for any reason that is not covered under the contract, that company can cash the BG.

A BG can be asked either by the seller or by the buyer depending upon the type of the deal and the terms of the contract. For example, if I am a manufacturer or a seller of a product that you want to buy, I may ask you to give me a BG before I manufacture or ship the product to you. In case of most international trade deals sellers ask for a BG from the buyer before shipping the product.