Airport row: Maldives government says settled, GMR denies

Last Updated: Wed, Dec 05, 2012 03:50 hrs

The tussle between the GMR group and the Maldives government took a new turn on Tuesday, with the latter saying that it had negotiated a settlement with GMR Male International Airport Ltd (GMIAL), according to which the company would hand over the airport on the midnight of December 7. It said the compensation to be paid to the company would be based on the decision of the arbitration case, being heard in a Singapore court.

However, GMIAL denied this, saying no settlement was arrived at between the two and it categorically refuted “the version of events being portrayed” about its meeting with top Maldives government officials on Tuesday.

The company, however, agreed to a suggestion made by the Maldives’ acting transport minister that the two should continue their dialogue. “We will always maintain dialogue, but our legal position is very clear and we will not compromise on our legal position, which is clearly supported by the injunction (by the Singapore High Court),” said Andrew Harrison, CEO of GMIAL.

  • Maldives government says the compensation to be paid to the company would be based on the decision of the arbitration case, which is being heard in a Singapore court
  • GMR Male International Airport Ltd (GMIAL) ‘categorically refutes the version of events being portrayed’ by the government
  • However, GMIAL agreed to a suggestion made by the Maldives’ transport minister that till the lawyers of both sides meet on Wednesday, the two sides should continue their dialogue

The Maldives government offered 100 per cent employment in Maldives Airports Company Limited (MACL) to all staff currently working for GMIAL and said an announcement would be made tomorrow by the MACL board. The offer includes both local and foreign staff at their existing terms and conditions, including salary.

The Maldives government, through a communication on November 27, had terminated the contract with GMIAL, which had the concession to run the Male international airport for 25 years, and asked GMIAL to hand over the airport within seven days.

Masood Imad, media secretary in the President’s office, told Business Standard: “GMR has agreed to a transfer of the operation to MACL and the handing over will be done on the zero hour. A deal has been negotiated.”

Masood added that while it was not possible at the moment to fix the quantum of arbitration, the matter would be decided in the Singapore court where it is under arbitration. He also reiterated that no force would be used and the transfer would be undertaken according to the law.

Asked about the telephonic conversation that Indian Foreign Minister Salman Khurshid had with his Maldives counterpart, Masood said: “They have been talking every day and the Indian government is completely aware of all the developments.” He also confirmed that Maldives President Mohammed Waheed would be writing to Prime Minister Manmohan Singh to explain the issue.

However, according to informed sources, Maldives got little comfort from the conversation between the two foreign ministers. Khurshid conveyed India's displeasure at the Maldives decision and underlined the scrapping of the biggest single Indian foreign direct investment in the Maldives would negatively impact bilateral trade ties and the larger relationship. He also stressed that legal ways should be found to resolve the stalemate.

“No arbitrary and coercive measures should be taken pending the outcome of the legal process underway. Resorting to any such actions would inevitably have adverse consequences for relations between India and Maldives.”

An Indian government spokesperson also said: “We are concerned over reports from Maldives about continuing violence and intimidation against elected representatives and expressions of radical sentiments. There is need to ensure that the rule of law is upheld and principles and tenets of democracy are maintained”.

Explaining the sequence of events, Harrison said he had received a telephone call from a colonel of the Maldives National Defence Force (MNDF), advising him that the acting transport minister, who is also the country’s defence minister, was meeting with MACL representatives at the airport, and would like to call upon him personally.

The meeting was attended by the transport minister, the chairman of the Maldives Civil Aviation Authority, and GMIAL lawyers, among others.

According to Maldives government officials, MACL would be operating the airport from Saturday morning in line with the government communication to GMR. They added that according to their legal advisors, the injunction issued by Singapore High Court does not prevent them from taking over the airport and the injunction could not be applied to a sovereign state.

However, Harrison said GMIAL had made its position clear. The company told Maldives’ brass that the Singapore high court had issued an injunction, which clearly prevents MACL or the Maldivian government from taking any action that will interfere with GMIAL’s operating the airport or taking it over at the end of seven days.

“We remain resolute in our position and there is no question of an offer being made and certainly no question of any alleged offer being accepted as we will simply not agree to our rights nor the injunction being undermined in any way,” added Harrison

The acting transport minister, according to Harrison, explained that he was not a legal person and would arrange for his legal team to meet GMIAL’s lawyers tomorrow to discuss the legal matters.

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