An Argentine court on Friday denied India's request to extradite Ottavio Quattrocchi, an Italian businessman, suspected of involvement in a highly publicised weapons-kickback scheme from the 1980s.
Federal Judge Mario Hachiro Doi ruled that Quattrocchi should not be extradited to India, but he did not immediately explain the decision. A written ruling is expected in the coming days.
The lawyer representing India, Miguel Almeyra, told Reuters he will appeal the decision with Argentina's Supreme Court.
Quattrocchi, 68, was detained in Argentina in February under a 1997 Interpol warrant and India formally requested that Argentina extradite him in March.
Indian investigators say Quattrocchi took $7 million in bribes as a middleman in the $1.2 billion purchase of artillery from Swedish arms maker Bofors AB in 1986 for the Indian army.
Quattrocchi has denied any wrongdoing in the Bofors matter, and India failed in its efforts to have him extradited from Malaysia five years ago.
"India will appeal this decision because it thinks Mr. Quattrocchi should face trial in Indian courts for once and for all," Almeyra said after the ruling in the northern Argentine town of Eldorado in Misiones province.
Almeyra said Quattrocchi fled prosecution and has been a fugitive of justice -- a charge which Quattrocchi's chief defense lawyer, Alejandro Freeland, has denied.
Quattrocchi was known as a friend of Sonia Gandhi, the powerful Italian-born chief of India's Congress Party.
Opposition Members of Parliament in India accused the Congress Party-led coalition of hiding news of Quattrocchi's detention in February to allow a one-month deadline for seeking his extradition to pass.
The arms scandal harmed the reputation of Gandhi's late husband, then-Prime Minister Rajiv Gandhi, and contributed to his government's electoral defeat in 1989.
An Indian court exonerated Rajiv Gandhi of wrongdoing in the case in 2004, 13 years after he was assassinated.