Singapore court to the rescue of GMR consortium
In a major respite to the GMR Group, the High Court of Singapore on Monday stayed the termination order of the Government of Maldives served on GMR Male International Airport Ltd (GMIAL) to exit from the airport project.
Soon after the order, a defiant Maldives hardened its stance to evict GMR from its soil at any cost. According to agency reports, Defence and Transport Minister Mohamed Nazim said at a press conference in Male the airport would be taken over by the state-run Maldives Airport Company Ltd. (MACL) from GMR by this weekend and GMR would be compensated.
The High Court granted injunctive relief against the applicability and operations of the termination order issued by the Ministry of Finance and Treasury (MoFT) on November 27, asking GMR to pack up in seven days.
“The High Court, upon hearing both parties, was pleased to grant this stay in favour of GMIAL [consortium of GMR-Malaysian Airports]. Both the Maldives Airport Company Ltd. and the MoFT, pursuant to the notice issued on November 27, either directly or indirectly are not allowed to interfere with the rights of the Investor [the consortium] under the concession agreement,” GMR said in a statement.
With this, GMIAL will continue to operate the Ibrahim Nasir International Airport as usual as per the provisions of the concession agreement. “As far as we are concerned, we will continue our operations,” said a GMR spokesperson.
GMR moved the Singapore High Court as it was mandated in the concession agreement that both the parties could approach the High Courts of London or Singapore to sort out their dispute, if any.
In a highly controversial decision, the Maldives terminated the contract though the GMR-led consortium was selected to run the airport for 25 years. GMIAL has so far invested $230 million. The company was mandated to invest $511 million to modernise the Male airport and to develop another one.
Meanwhile, Axis Bank, which has an exposure of $130 million to the project, has served a legal notice on the Maldives in a bid to protect its investment. Its representatives declined to comment. After the court order, GMR Infrastructure shares closed with a gain of 5.35 per cent at Rs.19.65 at the Bombay Stock Exchange.