AgustaWestland case: Delhi HC to hear Defence Ministry’s side against arbitration

New Delhi : The Delhi High Court on Wednesday agreed to hear the Ministry of Defence’s application regarding the arbitration proceedings in the AgustaWestland case.

The court was hearing proceedings going on between AgustaWestland and the Ministry of Defence.
Representing the Defence Ministry, Additional Solicitor General Pinky Anand alleged before the court that there are several criminal proceedings going on against AgustaWestland due to which arbitration proceedings can’t be allowed to go on.

However, the court stated that the issue requires further consideration, and asked AgustaWestland to file a reply within three weeks. It allotted two weeks’ time to the Defence Ministry to file rejoinder and affidavits.

Arbitral Tribunal has been advised that the court would like to go in the merits of the case since the offences involved are criminal in nature.

Ministry of Defence had sought a permanent injunction order to restrain AgustaWestland from continuing with the arbitration process due to the ongoing criminal cases before the trial court.

AgustaWestland had initiated the arbitration proceedings. It mentioned that the Ministry of Defence cannot unilaterally freeze payments in the Rs 3,600-crore deal.

Additional Solicitor General Anand also submitted that arbitral proceedings deserve to be stayed as the mandate of the Arbitral Tribunal stands terminated in accordance with Section 29A of the Arbitration and Conciliation Act, 1996.

She further stated that the allegations raised with respect to the entire transaction as also the allegations of corruption, fraud, and bribery cannot be gone into by the Arbitral Tribunal, and hence the disputes — not being arbitrable — the arbitral proceedings deserve to be stayed.

Arun Kathpalia, Senior Counsel appearing for AgustaWestland, stated that the present case is not governed by the provisions of Section 29A of the Act, inasmuch as the arbitral proceedings had commenced much prior to the Amendment Act of 2015 coming into force.
The case will next be heard on February 28.