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Posted on Dec 03, 02:35PM | IBNS
In a major reprieve to India-based GMR group, the Singapore High Court has stayed the termination of a multi-million dollar contract that the company was executing at Male airport in Maldives but got caught in the vortex of politics and anti-India feelings.
The Government of Maldives had earlier terminated the contract, triggering strong reactions from the GMR group.
After the court verdict, the shares of GMR shot up at the National Stock Exchange.
GMR earlier said that the action was unilateral and completely irrational.
The Government of Maldives [GoM] last week issued a notice to the GMR Male' International Airport Ltd [GMIAL] intending to take over the possession and control of the Ibrahim Nassir International Airport [INIA] under the pretext that the Agreement is void.
"This unlawful and premature notice on the pretext that the Concession Agreement [CA] is 'void' is completely devoid of any locus standi and is therefore being challenged by the Company before the competent forums. The Company disputes that the CA is 'void'," GMR earlier said.
GMR said the government action was in complete disregard of and has been done during the pendency of Arbitration proceedings in the designated Tribunal in Singapore.
Relations between India and Maldives had soured over the issue, especially after a government spokesperson said the Indian High Commissioner should leave their country over the airport project.
Maldives president Mohamed Waheed as well as pro-government Dhivehi Rayyithunge Party (DRP) later condemned the remarks made against the Indian High Commissioner D M Mulay by government Spokesperson Abbas Adil Riza.
At a rally organized by the Civil Coalition against Ibrahim Nasir International Airport (INIA) operator GMR (an Indian company), Abbas had said that Mulay had taken bribe from the Indian company and said that "the Indian High Commissioner would have to leave the country the same day GMR is ousted."
Abbas also purportedly called Mulay anti-Maldives and that he is not wanted on their soil.
But a day later, the government disassociated itself from the remarks.
GMR Male' International Airport Pvt. Ltd. is a joint venture company promoted by Bangalore-headquartered GMR Infrastructure Limited (GIL) along with its sole consortium partner Malaysia Airports Holdings Berhad (MAHB).
In June 2010, the consortium won concession for the Male International Airport (later renamed as Ibrahim Nasir International Airport ) for a period of 25 years.
Ibrahim Nasir International Airport INIA is the special purpose vehicle formed in Maldives pursuant to the concession in which the stake of GIL and MAHB is 77pc and 23pc respectively.
More than 1200 employees from Maldives Airports Company Ltd (MACL) will be transferred to GMR Male International Airport Pvt. Ltd. (GMIAL) as part of the privatisation.
After this transfer, MACL will only be responsible for Air Traffic Control, Aviation Security Command and some smaller offices.
All other departments that MACL was managing previously will be transferred to GMIAL.
There has been many criticism of the GMR managing the airport in Male. Many protests were organized against GMR and it has become very unpopular among the Maldivians, according to reports.