Male airport: GMR wins arbitration case against Maldives

In a significant development, the GMR Group has won the compensation case against Maldives at Singapore arbitration tribunal. As per the filing by the company, the tribunal has ruled that "the concession agreement (between GMR and Maldives) was valid and binding and was not void for any mistake of law or discharged by frustration."The tribunal has ruled that the government of Maldives (GoM) and Maldives Airport Company Limited (MACL) are "jointly and severally liable in damages to GMR Male' International Airport Limited (GMIAL) for loss caused by wrongful repudiation of the agreement as per the concession agreement." The GoM and MACL have been asked to pay GMIAL $4 million by way of costs within 42 days. The GMR Group has sought a compensation claim of $1.4 billion.The GMR Group had entered into a 25-year concession agreement with Maldives and MACL for modernization and operation of Male's Ibrahim Nasir International Airport (INIA) in 2010, a project worth $500 million. After a change of government, Maldives terminated the contract two years later. The government of Maldives initiated arbitration proceedings seeking a declaration that the concession agreement was void ab initio in November 2012 while GMIAL had disputed this 'wrongful' termination. A legal battle began with GMR Group challenging Maldives'; order in a Singapore court. The tribunal was also appointed in Singapore. After detailed proceedings lasting for more than 18 months, the tribunal has now issued an award.