VVIP Chopper Deal Scrapped: Indian MoD

India's Defence Minister AK Antony has officially announced the scrapping of a VVIP chopper contract, with effect from 1st January, 2014 on grounds that the Anglo-Italian firm AgustaWestland has breached the provisions of the Pre-contract Integrity Pact.

Antony stated in a letter to Rajya Sabha that subsequent to the termination of the contract, two Bank Guarantees amounting to $38 Million approximate have been encashed. Advance amount is adjusted against the payments for deliveries under the contract and is secured by advance bank guarantees provided by the seller on Deutsche Bank, Milan.

Demand was made on Deutsche Bank, Milan for encashment of advance bank guarantees. However, the seller has obtained ad interim stay from the Ordinary Tribunal of Milan, Italy against this. Steps are underway to get the stay vacated.

But no decision has been taken till date to debar the said company.