India has decided to file an appeal against the decision of the Italian court that barred India from encashing bank guarantees worth over 2,360 crore rupees of AgustaWestland as part of the penalties.

The penalties were imposed on the Italian company after scrapping of the 3,600 crore rupees VVIP chopper deal. A Defence Ministry spokesperson said this while adding that India has already encashed bank guarantees of around 240 crore rupees deposited in banks in India but it is yet to recover the bank guarantees deposited in banks of Italy.

An Italian court in Milan yesterday accepted a plea by AgustaWestland's parent company Finmecannica to stop India from encashing over 2,360 crore rupees.

India terminated the deal on January 1 for procuring 12 VVIP AW-101 choppers for the IAF on allegations of payment of kickbacks and involvement of middlemen in the acquisition process by the Anglo-Italian firm.

The Italian court had put a stay on India's effort to encash the bank guarantees in an earlier hearing on January 8. After the cancellation of the contract, India had also decided to go in for arbitration with the Anglo-Italian firm and the two sides have nominated their members in this regard.