The Maldives government has terminated a $511 million contract awarded
to Bangalore-based GMR Group in 2010 for the upgrade, expansion and
operation of Male International Airport. The government said the
agreement was “legally invalid,” a decision GMR is disputing.
The Maldivian government said its decision followed nine months of cabinet committee research and was made “on grounds that there were many legal, technical and economic issues regarding the agreement, and that it was legally invalid, and impossible to further continue … the legal teams agree and advise that this agreement, which was governed under the laws of the United Kingdom, was void ab initio, and/or that it was an agreement that could not be implemented further, due to frustration.”
GMR Group, which operates Delhi, Hyderabad and Istanbul, called the government decision an “irrational move.”
“The government of Maldives has … issued a notice to the GMR Male' International Airport intending to take over the possession and control of the Ibrahim Nassir International Airport under the pretext that the agreement is void,” GMR said. “This unlawful and premature notice on the pretext that the concession agreement 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.’”
The 25-year concession agreement was signed June 28, 2010 between a GMR-Malaysia Airports Holdings Berhad consortium, the Maldives Airports Co. and the government. Plans included the development of a 600,000 sq. ft. passenger terminal increasing the terminal capacity to handle 5.5 million passengers annually and the construction of a new 20,000 sq. ft. VIP terminal.
GMR group said it “has taken all measures to continue operations” at the airport “thereby ensuring that this vital gateway to Maldives is kept open … this action by the government is in complete disregard of and has been done during the pendency of arbitration proceedings in the designated tribunal in Singapore.”
The Maldivian government said its decision followed nine months of cabinet committee research and was made “on grounds that there were many legal, technical and economic issues regarding the agreement, and that it was legally invalid, and impossible to further continue … the legal teams agree and advise that this agreement, which was governed under the laws of the United Kingdom, was void ab initio, and/or that it was an agreement that could not be implemented further, due to frustration.”
GMR Group, which operates Delhi, Hyderabad and Istanbul, called the government decision an “irrational move.”
“The government of Maldives has … issued a notice to the GMR Male' International Airport intending to take over the possession and control of the Ibrahim Nassir International Airport under the pretext that the agreement is void,” GMR said. “This unlawful and premature notice on the pretext that the concession agreement 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.’”
The 25-year concession agreement was signed June 28, 2010 between a GMR-Malaysia Airports Holdings Berhad consortium, the Maldives Airports Co. and the government. Plans included the development of a 600,000 sq. ft. passenger terminal increasing the terminal capacity to handle 5.5 million passengers annually and the construction of a new 20,000 sq. ft. VIP terminal.
GMR group said it “has taken all measures to continue operations” at the airport “thereby ensuring that this vital gateway to Maldives is kept open … this action by the government is in complete disregard of and has been done during the pendency of arbitration proceedings in the designated tribunal in Singapore.”
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