The Union Law Ministry is said to have red-flagged the multi-billion dollar deal for purchase of 36 Rafale fighter jets from France on several counts.Besides the price that remains a bone of contention between Indian and French parties, the Ministry has raised questions over key clauses, including liability of Paris in case of any shortfall in implementation of the deal. The refusal of the French government to give any bank guarantees also remains a major issue. France has instead offered to provide a "comfort letter" from its prime minister. So it has objected to the watered-down liability clause, to be signed by the French government and the two French suppliers. The Defence Ministry has been advised that unless there is a joint and severe liability clause, India's interests may stand compromised. Law Ministry officials have also red-flagged the clause in the IGA (inter-governmental agreement) that in case of material breach by French companies of their obligations under the Supply Protocols, the Indian side would first take recourse to legal route against the companies without involving the French government. While the initial agreement provides that in case of any dispute, arbitration proceedings can be initiated in Geneva (Switzerland), the Ministry of Defence has been advised that the seat of arbitration be in India, especially since the government hopes to turn India into a hub for international arbitration. Indianmandarins has learnt that the Law Ministry is also concerned over the fact that the contract involves huge pay-outs without actual delivery. In the past, the practice has been submission of adequate government/ sovereign guarantees.