High-Level Group Can Settle Rafale Dispute, If Any: Nirmala Sitharaman

Any dispute in the execution of inter-governmental agreement for Rafale jets will be settled through the bilateral high-level group established by India and France, the government said on Monday.

In a written response to a question in the upper house, Defence Minister Nirmala Sitharaman said if any dispute between the two sides remains unresolved by the group, it will be settled by arbitration in accordance with the United Nations Commission on International Trade Law.

Elaborating on the inter-governmental agreement (IGA), she said the defence deal was signed on September 23, 2016 for the purchase of 36 Rafale fighter aircraft in fly-away condition, along with an initial consignment of weapons, maintenance support through performance-based logistic, simulator and associated equipment.

In the IGA, the French government has provided a "letter of comfort" signed by the French prime minister. The provision in the IGA along with the letter of comfort "provides adequate safeguards" to India, Ms Sitharaman said.

"Any dispute in the execution of the IGA will be settled through the bilateral high-level group established by the government of India and government of French republic. Any dispute not settled by this group shall be settled by arbitration in accordance with UNCITRAL arbitration rules," she said.

The minister said the unit cost of the basic Rafale aircraft in procurement through the IGA was about 9 per cent cheaper than the price arrived at in unconcluded MMRCA (medium multirole combat aircraft) process in which Dassault Aviation was L1 bidder in a global open tender.

The supply protocol for 36 Rafale jets has provision for commercial confidentiality, Ms Sitharaman said.

The non-disclosure of the Rafale jet's price has been one of the major issues over which the opposition has been attacking the government.

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