Konstruktorskoye Byuro Mashynostroyeniya’s (KBM) Igla-S was recently declared the lowest bidder for the Indian Army’s Very Short Range Air Defence System (VSHORADS) program beating Saab’s RBS 70NG and MBDA’s Mistraal. The new-generation man-portable missile systems will replace the outdated Igla-M MANPADs the Indian Army presently operates.

New Delhi: After being defeated by Russia's Rosoboronexport in the competition for supplying very short-range air defence systems (VSHORADS) to the Indian Army, Swedish firm SAAB on Thursday said that it was contemplating moving the court against the $1.5 billion deal alleging irregularity in the tendering process.

"We are evaluating the loss in the VSHORADS program, and evaluating a legal challenge that remains one of the options," Dean Rosenfield, SAAB's Asia-Pacific head said on Thursday in Bangkok.

Russia's Rosoboronexport was declared the winner of the tender which was floated in 2010 for the procurement of 5185 missiles and associated equipment under the Indian Army's VSHORAD program.

Indian defence ministry had announced the winner after the bid amount submitted by Rosoboronexport for supplying Igla-S was found well below the "benchmark price" of $2 billion while SAAB had bid $2.6 billion and the French firm, MBDA, quoted $3.7 billion.

"Reality certainly hits home, and it's a reminder that it's not all roses. But we have 60 days to decide if we wish to pursue this legally. We wouldn't want to waste the government's time or our own," Rosenfield added.

Sources in India's defence ministry told Sputnik that SAAB has alleged that the Russian system did not fulfil the performance in accordance with the requirement put out in the Indian Army's tender document. Besides, filing a complaint letter, an official of SAAB reportedly met with the officials of the Indian defence ministry. 

Nevertheless, the Indian defence ministry has refuted the allegations while clarifying that the defence procurement procedure had been duly followed.

"The case has progressed as per provisions of Defence Procurement Procedure with level playing field to all the participating vendors," the Indian Defence Ministry clarified earlier this week.