 "GMR wins $270 million arbitration award in Maldives airport dispute")
GMR has been awarded $270 million (Rs 1,780 crore) in compensation by a three-member international arbitral tribunal in its dispute with the Maldives government.
The award followed a ruling in February which upheld GMR’s case, on cancellation of an airport development contract there by the Maldives government in November 2012.
GMR stated the compensation covered the debt, equity invested in the project and a return of 17 per cent, beside termination payments and legal costs. The compensation is net of the taxes it might be required to pay in the Maldives.
A subsidiary of GMR had signed an agreement in 2010 with the government there and Maldives Airport Company Ltd (MACL) for modernisation and operation of the airport at Male, the capital city. The GMR company had won the right to build and operate the Ibrahim Nasir International Airport for 25 years, extendable by another 10 years.
GMR had planned to invest a little over $500 million in the project, including a debt component of $358 mn, arranged by Axis Bank.
The project had been at the centre of a controversy over collection of $25 as airport development fee. There also were allegations by the government that the previous ruling party had rushed through the bidding process.
Also Read
“It has always been our firm belief that cancellation of the concession agreement was wrong. We are happy that the Tribunal has unequivocally upheld this stand,” a GMR spokesperson said.
In June 2014, the arbitration tribunal had held the Maldives government and MACL had wrongfully repudiated the concession agreement and were liable for damages.
Compensation
- GMR group signs concession agreement with Maldives government in 2010 to develop and operate Ibrahim Nasir International Airport for 25 years
- The group planned $500-mn investment which included $358-mn loan arranged from Axis Bank
- Maldives government terminated the contract in 2012
- In 2014, the arbitration tribunal ruled that Maldives government had wrongfully repudiated the airport contract
- In October 2016, the arbitral tribunal awards $ 270-mn compensation to GMR group