Law

With the Supreme Court to Rule on Rafale Deal, Here's a Guide to the Issues

The Centre has defended the deal for 36 Rafale fighter jets and opposed the public disclosure of pricing details.

New Delhi: The Supreme Court will deliver its verdict today, December 14, on a clutch of petitions seeking an independent court-supervised investigation into the Narendra Modi government’s decision to buy 36 Rafale fighter jets in a flyaway condition from France.

The purchase decision was made and announced by Prime Minister Narendra Modi at a press conference in Paris on April 10, 2015, and effectively led to the scrapping of an earlier deal then under negotiation for the purchase of 126 Rafale jets, 108 of which were to be manufactured in India under license by the government-owned defence company, Hindustan Aeronautics Ltd.

Though Modi’s announcement was questioned at the time, the deal snowballed into a major political controversy over the past year with questions being raised over the price of the aircraft, the decision to abandon their manufacture in India, the process by which the new decision was taken and the choice by Dassault Aviation – the French company that makes Rafale – of Anil Ambani’s Reliance Defence as an offset partner for the deal. A particular trigger for the controversy was the disclosure by Francois Hollande – who was president of France during Modi’s visit to Paris in April 2015 – that Anil Ambani had been foisted on the French side by the Modi government.

Also Read: Indian Govt Suggested Reliance as Partner in Rafale Deal, Hollande Tells French Website

The first petition in the matter was filed by a lawyer, M.L. Sharma. He was joined later by another lawyer,  Vineet Dhanda, seeking an independent probe. AAP leader Sanjay Singh has also filed a petition against the deal. Following this, former Union ministers Yashwant Sinha and Arun Shourie, along with advocate Prashant Bhushan – who had already filed a criminal complaint against the prime minister with the Central Bureau of Investigation – moved the court with a plea to direct the CBI to register an FIR.

Full Text: Complaint Filed With CBI Against Narendra Modi, Manohar Parrikar in Rafale Case

Chief Justice Ranjan Gogoi – who made it clear at the outset that he would primarily be examining procedural aspects of the purchase – reserved the court’s verdict on November 14, after several days of arguments.

The Centre has defended the deal for 36 Rafale fighter jets and opposed the public disclosure of pricing details.

The government has refused to publicly divulge pricing details of the deal, saying it would give undue advantage to India’s enemies.

India signed an agreement with France for the purchase of 36 Rafale fighter aircraft in a fly-away condition as part of the upgrading process of Indian Air Force equipment. The deal is estimated to be about Rs 58,000 crore (about USD 8 billion).

Also Read: Rafale Twist: Why Did France Refuse to Give India a Sovereign Guarantee?

While hearing  pleas alleging criminality in the Rafale deal and seeking a court-monitored probe, the apex court asked wide-ranging questions of the government on issues including the lack of sovereign guarantee from the French government, the selection of Dassault’s Indian offset partner and the need to enter into an inter-governmental agreement (IGA) with France.

The court took note of submissions and counter arguments on pricing of the fighter jets with the petitioners alleging that the government has been giving “bogus arguments” and “hiding behind the secrecy clause”.

Defending the non-disclosure of price publicly, Attorney General K.K. Venugopal, appearing for the Centre, said that the cost of a bare Rafale jet as per 2016 exchange rate was Rs 670 crore and the disclosure of price of a “fully loaded” aircraft would give an “advantage to the adversaries”.

Bhushan claimed that the Union law ministry had red-flagged two issues – the absence of a sovereign guarantee by France and an international arbitration clause in the IGA as per which the arbitration seat would be at Geneva – but the government nevertheless went ahead with the deal.

Venugopal has admitted that there was no sovereign guarantee, but said that France has given a ‘letter of comfort’, which he said was as good as a governmental guarantee.

The court also interacted with senior Indian Air Force (IAF) officers and enquired about the requirements of the force.

The IAF officers emphasised the need for induction of ‘four plus or fifth’ generation fighter aircraft like Rafale, which have niche stealth technology and enhanced electronic warfare capabilities.

However, the need for their testimony and the manner of their questioning has come in for criticism from legal analysts.

Confusing one Ambani for the other

Dassault’s chairman, Eric Trappier, has also fuelled the controversy by making misleading statements about the relationship between the two Reliance group of companies, one owned by Mukesh Ambani and the other by Anil Ambani.

Dassault had signed an MoU with a Mukesh Ambani company in 2012 for cooperation in the manufacture of the 108 Rafales that were to be made in India under license as part of the earlier deal. In interviews, Trappier has repeatedly cited that MoU (with Mukesh Ambani’s Reliance) as proof that Dassault had an association with Anil Ambani’s Reliance which predated the Modi visit.

Dassault’s investment of approximately 40 million euros in a second Anil Ambani company – the largely inactive Reliance Airport developers Limited (RADL) – in 2017 has also raised eyebrows since the French weapons manufacturer is not normally given to purchasing stakes in companies that are outside its core interest.

With inputs from PTI

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