India lifted a ban in early November on defence supplier AgustaWestland and its Italian parent company, Leonardo, paving the way for the companies to participate and bid in ongoing projects and upcoming defence contracts.
The companies were banned in 2015 for 10 years from participating in any defence contracts following allegations of corruption in a helicopter supply contract.
The corruption allegation, dubbed the VVIP chopper scam because it involved the purchase of helicopters to carry the president, prime minister and other important dignitaries, relates to an agreement signed between the Indian National Congress-led United Progressive Alliance government and the Anglo-Italian helicopter manufacturer in 2007.
The deal was put on hold after Italy arrested the head of AgustaWestland’s parent company, then known as Finmeccanica, over allegations of using bribery to win the contract. The scam-tainted Finmeccanica changed its name to Leonardo in 2016.
The ban was lifted because the Anglo-Italian company withdrew its claims against the Indian government, having supplied three of the 12 helicopters without getting paid.
Although the ban has been lifted, India’s Central Bureau of Investigation and the Enforcement Directorate continue their probe into the alleged INR36 billion (USD473.35 million) corruption scandal, and there are concerns that this enforcement action can be seen as being contradictory.
However, Ashish Bhan, a New Delhi-based partner and member of the dispute resolution practice at Trilegal, says: “Lifting the ban is a win for both sides, as AgustaWestland is allowed to bid, and India gets access to better technology, which in the future could see technology transfer.”
The Briefing is prepared by Freny Patel.