New Delhi, Jan 1 (IANS): India Wednesday terminated the Rs.3,600 crore deal with AgustaWestland for the purchase of 12 VVIP choppers over allegations of kickbacks having been paid to fix the deal.

In a statement, the defence ministry said: "The government of India has terminated with immediate effect the agreement that was signed with Mssrs AgustaWestland International Ltd. (AWIL) on Feb 8, 2010, for supply of 12 VVIP/VIP helicopters on grounds of breach of pre-contract integrity pact and the agreement by AWIL."

"Based on the opinion received earlier from the attorney general of India, it has been the view of the government that integrity related issues are not subject to arbitrations. However, AWIL has since pressed for arbitration and appointed an arbiter from its side. In view of this, the MOD (ministry of defence) sought afresh the opinion of the attorney general. With a view to safeguard the interest of the government, the MOD has nominated Justice B.P. Jeevan Reddy as its arbitrator."

The cancellation comes more than a year after media reports that two top officials of the company had allegedly paid bribes to bag the contract.