Contract with India: the Civil Court of Milan confirms the prohibition to pay collateral
Finmeccanica informs that today the Court of Milan – upholding the appeal lodged by its subsidiaries AgustaWestland S.p.A. and AgustaWestland International Ltd seeking an emergency interim ruling on the resolution by the Indian Defence Ministry of the contract to supply 12 AW 101 VVIP/VIP helicopters – confirmed the ruling issued last January 8, prohibiting, as a preventive measure, Deutsche Bank S.p.A. to pay the collateral of over EUR 278 million deposited in relation to the contract.
The decision of the Milan Court upheld almost all the claims made by the two companies, recognizing the patently abusive behaviour of the Indian Defence Ministry in demanding the payment of the collateral on the grounds of generic allegations in relation to the unspecified non-performance of contractual obligations.
Limitedly to the roughly EUR 28 million in warranty bonds, which have already been paid out by the State Bank of India and by Deutsche Bank A.G., and to the earnest money deposit of approximately EUR 350,000, the Court of Milan declared lack of jurisdiction and refrained from deciding on the issue.
AgustaWestland is represented by Cleary Gottlieb Steen & Hamilton Law Firm.