India Top Court Refuses to Order Probe Into French Warplane Deal

(Bloomberg) -- India’s top court has rejected a plea to investigate a multi-billion dollar purchase of French warplanes for the country’s air force, a verdict that comes as a reprieve for Prime Minister Narendra Modi’s government ahead of federal elections next year.

A three-judge bench headed by Chief Justice of India Ranjan Gogoi said it will not examine the deal and said that an individual petitioner’s doubts about the deal are not enough to prompt a probe into the $8.7 billion aircraft purchase. They court accepted the government’s explanations on the decision-making process, the final price and the local Indian company chosen as the so-called "offset" partner.

"It is certainly not the job of this court to examine the pricing," Gogoi said in court. "Our country can’t afford to be unprepared in matters of fighter aircraft."

The top court’s verdict refusing to order a probe is likely to blunt the political opposition’s graft allegations against the ruling Bharatiya Janata Party government, which stormed to power on an anti-corruption platform in 2014. The rival Congress Party has been trying to make the purchase of 36 Rafale fighter jets a campaign issue ahead of the 2019 election, holding press conferences and raising the issue in raucous parliament sessions.

Allegations

Gogoi said it isn’t possible for the top court to examine the wisdom of choosing a 36-jet order over the 126-aircraft deal negotiated by the previous government.

The opposition has accused Modi’s administration of scrapping a 126-jet deal negotiated by the previous Congress-led government and acquiring 36-fighter jets at a higher price. They also allege India’s government forced France’s Dassault Aviation SA, which is making the aircraft, to partner with Indian businessman Anil Ambani’s Reliance Group for the additional investments necessary for India to award the purchase to the French firm. Ambani has denied all allegations of wrongdoings in the deal.

Shares of Reliance Naval & Engineering Ltd., the unit which tied up with Dassault, surged 13 percent at 11:15 a.m. in Mumbai.

The government’s top law officer Attorney General K.K. Venugopal had urged the court not to get into decide on technical issues related to the nation’s defense.

To contact the reporter on this story: Upmanyu Trivedi in New Delhi at utrivedi2@bloomberg.net

To contact the editors responsible for this story: Unni Krishnan at ukrishnan2@bloomberg.net, Iain Marlow

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