GMR sticks to $1.4 bn claim for Male contract termination
Quotes

GMR sticks to $1.4 bn claim for Male contract termination

Last Updated: Friday, April 25, 2014, 17:43
 
 Comment 0
 
GMR sticks to $1.4 bn claim for Male contract termination
New Delhi: With a legal tussle on between the Maldivian government and GMR over termination of a contract to develop Male international airport, the Indian infrastructure firm on Friday said it stood by its compensation claim of USD 1.4 billion.

The two sides are currently in arbitration before the Singapore Court of Appeal and preliminary proceedings have begun last week.

GMR's reaction came after a Maldivian media report quoted President Yameen Abdul Gayyoom as saying that his government would have to pay compensation to the Indian company "at any cost".

"We believe that the government will have to pay compensation to GMR at any cost. We're trying to get the sum that we have to pay lowered - we're trying to get it reduced to a more plausible sum," Maldivian news portal 'Haveeru Online' quoted the President as saying.

In 2012, the over USD 500 million airport development project was unilaterally scrapped by the then Maldivian government headed by President Mohamed Waheed. The case had then gone for arbitration at the Singapore Court of Appeal. Under the contract signed in 2010, GMR was to modernise and operate the airport for 25 years.

In the report, Gayoom was also quoted as saying that the contract with GMR was signed by a sovereign government and therefore, Maldives will have to pay the compensation. The statement came before the Maldivian President departed Male for the Maldives Investment Forum 2014 in Singapore.

This is the first time that the Maldives government has acknowledged that compensation has to be paid to GMR, company officials here said, but described the termination of the contract as "wrongful".

They said their claim was that "the forceful takeover of the airport by the Maldives government amounts to repudiation of a valid contract and therefore damages, including loss of future profits, has to be paid. Thus, GMR's claim is USD 1.4 billion."

The contract, which was signed during President Mohamed Nasheed's administration, was terminated by President Mohamed Waheed's government which claimed it was void ab initio or since the time it was signed.

This was done after the then government alleged irregularities in the bid process, which was organised by World Bank's International Finance Corporation and supported by AusAid (Australia), Ministry of Foreign Affairs of the Netherlands and DevCo, a multi-donor programme.

On November 27, 2012, Maldivian government and the state owned enterprise which oversaw the airport gave notice to GMR -led Male airport operator GMIAL to vacate the premises and hand over the management.

When President Gayoom took over and visited India this January, Prime Minister Manmohan Singh had urged him to "amicably settle the issue" of Male airport and address the problems faced by some Indian investors in Maldives.

There were also reports about Maldives authorities looking for an out-of-court settlement, but GMR sources said no such talks have been held.

Under the arbitration proceedings in Singapore, the first stage was to hear the two sides and establish whether the contract was valid. This, the sources said, was likely to be decided by the end of May.

The next step would be on how much compensation should be paid to the aggrieved party GMR, they said.



PTI

First Published: Friday, April 25, 2014, 17:41


Comments


comments powered by Disqus
John Kery with Indian Biz Honchos
John Kery with Indian Biz Honchos
Honda Mobilio MPV
Honda Mobilio MPV
BRICS Annual Summit 2014
BRICS Annual Summit 2014
Tata Zest Standout Features: In Pics
Tata Zest Standout Features: In Pics
New car launches in July
New car launches in July

Web Wrap
Contact Us : Privacy Policy : Legal Disclaimer
Copyright © Zee Media Corporation Ltd. All rights reserved