Relief for GMR, Singapore High Court stays Maldives decision
The Indian infrastructure major GMR-led consortium Monday got an interim relief from the Singapore High Court which asked it to continue operating the international airport in the the Maldives capital Male.
The High Court of Singapore suspended the Maldives government's decision last week to terminate the USD 500 million contract awarded to the consortium for developing the Ibrahim Nasir International Airport at Male.
"High Court of Singapore today (Monday) granted injunctive relief (stayed) against the applicability and operations of (contract termination) letter issued by the ministry of finance and treasury (MoFT), government of Maldives," GMR said in a statement.
"The High Court upon hearing both the parties was pleased to grant this stay in favour of GMIAL (consortium of GMR-MAHB)."
However, the arbitration process will continue on the sidelines, said a company official.
The Singapore High Court is acting as an arbitrator in the issue between the GMR-backed consortium GMIAL and the Maldives government. Under the contract, the law of either Singapore or Britain would apply in case of differences between parties.
GMIAL, which is a consortium of GMR and Malaysian airports operator MAHB, had won the right to operate and modernise Ibrahim Nasir International Airport in a bidding conducted by IFC, an arm of the World Bank.
The Maldivian cabinet had directed GMIAL to hand over the airport within seven days to state-owned Maldives Airports Company (MACL). It had also asked GMR to vacate and remove all property from the airport within 30 days.
According to GMR, both MACL and the MoFT, under the concession agreement, "are not allowed to interfere with the rights of the Investor (GMR-MAHB consortium)".
"With this (judgment), GMIAL shall continue to operate the Ibrahim Nasir International Airport as usual as per the provisions of the concession agreement," GMR Said.
The GMR Group had termed the cancellation of the contract as unlawful and is planning to take legal action against the Maldives government for scrapping its investment of more than USD 500 million in the project.
Several Indian banks like Axis Bank, Indian Overseas Bank and Indian Bank have contributed about USD 368 million to the project. This is also the single largest Indian foreign direct investment in the Maldives.
The project was awarded to the GMR Group through an international tender advertised by the Maldives government under the tenure of former president Mohamed Nasheed, who was ousted in February 2012.
The cancellation of the contract had its diplomatic fallout, with the Indian government saying it could affect bilateral ties and a "very negative signal" to foreign investors.