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GMR to take all 'legal remedies' to protect Male contract

New Delhi, Dec 4, 2012, (PTI)
AFP File  PHOTO

Stating that GMR Infrastructure has not invested in Maldives "to be compensated", the company has said it will take all "legal remedies" to protect its USD 511 million airport contract in the island nation.

"It's not a question of compensation. We did not come here for compensation. We came here because we competed competitively in an international tender and we won that bid," CEO of GMR Male International Airport Andrew Harrison told PTI from Male on phone last night.

He added that the Maldives government, which had given a sovereign guarantee, did not follow the terms of the agreement, which has laid down a proper procedure to be followed even in the case of terminating the contract. When asked whether GMR would move to the International Court of Justice in case of a forceful take over of the Male airport by the Maldivian government, he said: "We will follow every single legal remedy that is available to us. We will ensure that our rights are protected. There are international laws that has to be followed by the countries."

Yesterday, GMR had secured a stay from the Singapore High Court against the Maldives government notice of November 27, through which its contract was terminated and the company was asked to handover the airport within seven days.

Immediately after the Singapore High Court verdict, Maldives made it clear that its termination decision was "non -reversible and non-negotiable" and said no such injunction can be issued against a sovereign state.

"The government's decision is very clear. It is non-reversible and non-negotiable. Our decision was based on legal advice we got from our lawyers in the UK and Singapore," Maldives President Mohamed Waheed's press secretary Masood Imad told PTI in Male.

However, the GMR CEO said that terms of termination, that is part of the 25-year concession agreement signed by a GMR-led consortium, Maldives Airports Company Ltd (MACL) and government of Maldives for running the Male airport, have not been followed by the local government.

According to him, in case of termination or contract getting void, the Maldives government will ensure that investment of Axis Bank, the lenders of GMR for the project, would be protected and a notice of 60 days will be given.

Besides, the compensation will be paid within 60 days and before the control of the airport is given to any one else, he said while elaborating the termination clauses of the agreement.

"60 days notice period has not been given (by the Maldives government) and Axis Bank has not been paid any of its outstanding money. Separate to that, the concession agreement also specifies a formula to be calculated in the event of termination and what is to be paid to us. None of that has taken place," he said.

Harrison also questioned the stance of the Maldives government that its decision of termination of Male airport contract to GMR was "non-reversible and non-negotiable" and a local dispute cannot be dealt by a Singapore court.

"If that was the case, then why was the government representative sitting in the court room in the first place. If you did not believe that court has jurisdictions over affairs in this country, then you do not have representatives sitting there in the courtroom," he said.
He also said GMR has not opened any back channel negotiations with the Maldives government and the company believes in "resolving the issues in a legal way".

The Male airport venture has been the most profitable for GMR in terms of its airports business segment. The Bangalore-based company has so far invested about USD 250 million on managing and upgrading the facilities at the Male airport.

However, the Maldivian government had terminated GMR-led consortium's USD 511 million contract last week to run the Male international airport and asked it to handover the control of the airport within seven days.

The bone of contention between GMR and Maldivian government is levy of an Airport Development Charge (ADC) of USD 25 per passenger and USD 2 per passenger insurance surcharge. The levy was supposed to be charged from January 1 this year but a local civil court had struck down the proposal in December last year.

After that, the then government headed by by Mohamed Nasheed agreed to compensate GMR against the levy. However, the decision was reversed by the new regime early this year, leading to GMR filing for arbitration in a Singapore court.

Currently, GMR claims that it has dues of over USD 3 million on the Maldivian government. To resolve the issue, the company had also offered to exempt all Maldivians from the levy and instead charge USD 28 per passenger on all foreigners. This has not yet been accepted by the Maldives government.


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