Singapore court had earlier ruled in favour of company
In what could spell more trouble for the Bangalore-headquartered GMR Group, the Maldives Government has said that its decision to cancel the Male airport modernisation was “non-reversible and non-negotiable”.
Earlier in the day, the Singapore High Court had ruled in favour of the GMR consortium saying that the Maldives Ministry of Finance & Treasury and Airports Corporation Ltd are not allowed to interfere either directly or indirectly with the rights of the investor (GMR consortium) under the concession agreement.
“GMR has to vacate the airport by December 7. We will pay compensation. The process has been initiated. The exact amount of compensation will be decided later,” Masood Imad, Press Secretary to the President told Business Line on phone from Maldives.
Masood’s statement came hours after the Singapore High Court’s ruling in favour of the GMR consortium.
Following the Singapore court’s ruling, GMR issued a statement saying, “GMR Maldives International Airport Ltd shall continue to operate the Ibrahim Nasir International Airport as usual as per the provisions of the Concession Agreement.”
The GMR Group had moved a Singapore court against the November 27 Maldives Government decision to cancel its contract to modernise the airport. GMR has been asked to hand over the airport back to Maldives Airports Corporation Ltd by December 7.
In a statement the Maldives Government said “Our decision was based on legal advice we got from lawyers in Singapore and the UK. We believe that the judge was incorrect in interpreting the law as, where compensation is adequate, an injunction cannot be issued and a court cannot issue such an injunction against a sovereign state.” The contract stipulates that in case of differences between various parties, either the UK or Singapore law would apply.
There was no immediate official comment from the GMR group, although sources in the company maintain that they have till December 7 to decide on their next move. At about $500 million, this is the largest foreign direct investment in Maldives. The GMR-led consortium won the project to modernise the airport in 2010 through a global tender.
The GMR stock price closed 5.36 per cent up at Rs 19.65 on the BSE.