ISRAEL MILITARY INDUSTRIES LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) FACTS/BACKGROUND The petitioner before me, i.e., Israeli Military Industries Ltd. (in short IMI) is a company, which is wholly owned by the Government of Israel and incorporated under the laws of Israel. IMI is aggrieved by an order dated 05.03.2012, issued by the Ordinance Factory Board (in short OFB), i.e., respondent no. 2. The impugned order impacts IMI in two ways. Firstly, it seeks to cancel a turnkey contract awarded to it, pursuant to a global tender floated, to set up a plant for manufacturing By-Modular Charge Systems (in short BMCS), alongwith associated civil works in Nalanda, in the State of Bihar (hereinafter referred to as BMC project). Secondly, it proceeded to debar IMI from further business dealings with OFB for a period of ten (10) years.

(2.) The principal ground on which the impugned order is challenged is that, it was passed without due compliance of the principles of natural justice. There were several submissions made on behalf of IMI in support of this main submission, which were really off shoots of this main submission. I shall be dealing with each of them in the course of my judgment. The respondents, as is expected, have repelled these charges.

(3.) IMI, which claims to be one of the leading players in providing military hardware and technology, entered into a Memorandum of Understanding (in short the MOU) with OFB, on 26.10.2003. The MOU generally details out the common objective of the two parties, which was to co-operate, in the manufacture and supply, to their customers worldwide, the products which the parties intended to produce jointly. It may be useful to notice that the Government of India and the Government of Israel as a prelude to the MOU had executed a Bilateral Investment Treaty (in short the Treaty) to further the trade between the two countries, on 29.01.1996.