India may also levy damages of more than 500 million Euros (around Rs 4000 crore) on the company while invoking the clauses under the Integrity pact of the deal, sources said. (Agencies)
AgustaWestland had invoked the arbitration clause in the deal in October last year, contending that the Defence Ministry could not "unilaterally" freeze the payments in the Rs 3600 crore deal. Of the amount, India had already paid 30 percent.
India had then refused to be drawn into arbitration process but after cancelling the deal yesterday, it decided to participate in it. It nominated Justice (retd) B P Jeevan Reddy as its nominee for the arbitration process on the advice of the Attorney General.
AgustaWestland has nominated Justice (retd) B N Srikrishna as its nominee for arbitration.
As per the rules, in case the two parties do not have an agreement on the payments within 60 days, a three-member tribunal is expected to be set up for arbitration.
The tribunal is expected to have one member from each party and the third member will be mutually decided but will not be from either of the two nations or any nations that either party has an objection to.
The Defence Ministry has also set in motion the process of encashing the bank guarantee of over 260 million euros (around Rs 2200 crore) furnished by AgustaWestland.
India may also levy damages of more than 500 million Euros (around Rs 4000 crore) on the company while invoking the clauses under the Integrity pact of the deal, sources said.