India’s defense ministry said Sunday that it will immediately begin efforts to recover 278 million euros ($380 million) stuck in Italian banks as guarantees issued in a controversial deal to buy helicopters from AgustaWestland that was scrapped in January following allegations of bribery and corruption.

A Milan court ruled on Friday to allow India to encash the bank guarantees and also instructed the Anglo-Italian helicopter company and Deutsche Bank to reimburse legal costs to the Indian government. Allegations about kickbacks to senior Indian defense officials in the 560-million-euro helicopter deal involving Italian company Finmeccanica, which owns AgustaWestland, came to light in February 2013 when Finmeccania’s former CEO Giuseppe Orsi was arrested in Italy, following which India stopped all payments to AgustaWestland.

"The appellate court in Milan, Italy, in its judgment Friday, May 23, 2014, has substantially upheld the claims of Government of India against AgustaWestland International Ltd (AWIL), AW Spa and Deutsche Bank, Italy, on the encashment of bank guarantees and performance bond in the VVIP helicopter case," an official statement from the Indian Defense Ministry said, according to IANS, a local news service.

In February, India had cashed two bank guarantees, but an Italian judge later blocked the remaining 278 million euros ($380 million) while, according to Reuters, Finmeccanica said that the company will try to safeguard the guarantees using an arbitration process it launched this year after the Indian government suspended the contract for the choppers.

After Orsi's arrest, India’s defense ministry froze all payments to be made for the 12 AW-101 choppers that it had ordered from AgustaWestland. At the time of the cancellation, the company had delivered only three helicopters while nearly 45 percent of the contract value was paid. 

An official told the Times of India that the company could "be blacklisted for a minimum period of five years, which is extendable," if certain provisions of the contract are violated.