New Delhi, Nov 25 (IANS): There is "no question" of arbitration in the 556.262 million euro (Rs.3,726.96 crore) AgustaWestland deal for VVIP choppers that the government wants to axe on grounds of graft, Defence Minister A.K. Antony said Monday.

"There is no question of arbitration," Antony said in response to a question on the deal.

"A showcause notice has been given, we are waiting for a response," Antony said.

The defence ministry Oct 21 issued a show cause notice to AgustaWestland, the Britain-based subsidiary of Italian conglomerate Finmeccanica, to cancel the deal for supplying 12 AW-101 VVIP helicopters to the Indian Air Force (IAF), informed sources said.

Sources said the Anglo-Italian company was asked to give a written reply to the show-cause notice by Nov 26 regarding the contract.

The company last week nominated former Supreme Court Justice B.N. Srikrishna judge for arbitration.

While sources say a cancellation of the contract is likely, final decision of the ministry will be known after the company gives its written reply.

India concluded a contract with AgustaWestland in February 2010 for the 12 helicopters, three of which have already been delivered to the IAF.

However, following allegations of kickbacks against top officials of the Anglo-Italian firm, the contract for VVIP choppers was frozen.

Antony has accused the company of violating its contractual obligations.

The helicopters were for the IAF's elite Communication Squadron which ferries the president, the vice president the prime minister and other VVIPs. The Comptroller and Auditor General slammed the defence ministry and IAF for deviations from procedures in procurement of the choppers.