The Anglo-Italian aerospace company, AgustaWestland, last night said there was no "adequate basis to take any action against the company" after India served a termination notice for the contract to supply 12 helicopters amidst allegations of bribery.
Responding for the first time
to India cancelling the multi-crore deal to supply helicopters to the Indian Air Force on Wednesday, the company said in a statement that it had now received from India's Ministry of Defence a notice of arbirtration and another of termination of the contract.
It said: "AgustaWestland still finds that neither the termination notice by the Ministry of Defence nor the show cause notice, from which this termination notice stems, offers adequate basis to take any action against the Company. It is the Ministry of Defence's admitted position that the tender process has been duly followed".
The statement added: "Accordingly, the termination notice received yesterday will have to be discussed within the framework of a fair arbitration process. To this end, AgustaWestland will soon propose the names of the persons for the purpose of selecting the third arbitrator by agreement of the parties, as requested by the Indian Ministry of Defence".
The company said it remained committed to working with the Government of India to resolve the issues and was ready to perform the remaining obligations under the agreement for the supply of the helicopters.
AgustaWestland, which is part of the Finmeccania group, will continue to support the three helicopters that had already delivered to India and were currently operated by the Indian Air Force.
"Finmeccanica has already introduced stringent ethical procedures common to all Group companies that have harmonized their systems of rules based on the standards set by the parent company. These processes are reviewed regularly and have been further strengthened in correspondence with the most stringent international ethical standards", the company said.
It added: "AgustaWestland applies the same strict procedures to prevent corruption in accordance with the updated Finmeccanica policies".
The company also indicated that cancelling of the India contract was likely to lead to job losses - "reduction to the workforce" - at its plant in Yeovil, Somerset, as part of a mitigation plan it had prepared.
Reports from Yeovil said AgustaWestland workers were "deeply hurt" at India cancelling the contract.
Joe Conway of workers union Unite, said the firm's reputation had been damaged: "It's difficult. People are deeply hurt by it. People are worried. My guys who make them - they've done their work and it doesn't mean that much right now but our reputation has been damaged in Yeovil. I've been here 40 years and nothing like this has ever happened."
Yeovil's Liberal Democrat MP and Education minister in the David Cameron government, David Laws, said the Indian government should have waited for proof before pulling out of the deal.
He said: "In my view it would have been preferable to give time to establish the veracity of the allegations which have been made before taking any action. I've spoken to the chairman a couple of times over the last two days - we know that the Indian government is talking about putting in place a process of arbitration between it and the company".
Laws added: "That holds out some last hope of getting a resolution of some aspects of this but we don't know what the arbitration is about and how extensive it will be. It is a blow but we mustn't get things out of perspective".
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