India had decided to scale down diplomatic relations with Denmark after the refusal of Danish authorities to appeal a lower court order against extradition of Kim Davy, wanted by the Indian government in the Purulia arms drop case.
Though Denmark had initially accepted India's request for extradition, Davy challenged the authorities in a city court in Copenhagen which ruled in his favour.
The Danish authorities challenged the decision in the High Court which upheld Davy's, objections and cited India's over-crowded jails and what it described as the country's poor human rights records for prisoners.
In their attempt to persuade Denmark to ask its Supreme Court for permission to extradite Davy, Indian officials had offered a special jail for him.
The Indian government had been advised by three law firms in Denmark of an appeal having merit.
A huge arms consignment was air dropped in December 1995, in West Bengal's Purulia district. The consignment included hundreds of AK-47s and it was claimed the weapons were meant to arm members of a sect called the Anand Marg, that wanted to revolt against the communist government of the state.