GMR wins int'l arbitration against Maldives, gets $270 million payout
GMR Group today said it has won an international arbitration against the Maldives government and has been awarded USD 270 million as compensation from the island nation after its contract to build an international airport in Male was arbitrary cancelled.
Mumbai: GMR Group today said it has won an international arbitration against the Maldives government and has been awarded USD 270 million as compensation from the island nation after its contract to build an international airport in Male was arbitrary cancelled.
GMR Infrastructure, which owned GMR Male International Airport (GMIAL), said the arbitration award was given by a three-member international arbitral tribunal.
The USD 270-million compensation covers the debt and equity invested in the project along with a return of 17 percent and also termination payments and legal costs. The compensation is net of taxes that GMR Male may be required to pay in the Maldives, said a statement from the company.
GMIAL had entered into a concession agreement with the Maldives government and Maldives Airport Company (MACL) in 2010 to modernise and operate the Ibrahim Nasir International Airport in the national capital of Male.
However, the concession agreement was wrong fully repudiated both by the Male government and Maldives Airport Company on November 29, 2012, it said, alleging that the same was void ab initio.
This happened after a coup in the country that led to a change of government in the Indian Ocean nation. GMR challenged the cancellation at the Singapore international arbitration tribunal.
"It has always been our firm belief that the cancellation of the concession agreement was wrongful. We are happy to note that the tribunal has unequivocally upheld our stand and closed the adjudication with a final award of compensation," the GMR Group said.
Earlier in June 2014, the arbitration tribunal had held that Maldives and MACL had wrongfully repudiated the concession agreement and that they were jointly liable to pay damages to GMIAL for the losses caused.
GMR Group operates India's busiest and largest Indira Gandhi International Airport in New Delhi and the greenfield Rajiv Gandhi International Airport in Hyderabad.
It recently bagged rights to develop and operate Goa's new greenfield international airport in Mopa.
It is also developing the Mactan Cebu International Airport in the Philippines in partnership with Megawide Construction Corporation.
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