In a reprieve to Indianinfrastructure major GMR, the Singapore high court on Monday stayed the Maldives government's decision to terminate the $500 million contract awarded to a consortium led by it for modernising the Male international airport.
The move is likely to pave way for the GMR to continue operations at Ibrahim Nasir International Airport (INIA) in Maldives.
"GMR Male International Airport Pvt Ltd (GMIAL) is pleased to advise that the High Court of Singapore has today granted injunctive relief against the applicability and operations of Letter dated November, 27 issued by the Ministry of Finance & Treasury (MoFT), Government of Male," GMR Infrastructure said in a statement in Singapore.
As per the contract in the project, in case of differences between various parties, the law of either Singapore or UK would apply.
The statement said the high court upon hearing both the parties granted the stay in favour of GMIAL, a joint venture company in which GMR Infrastructure (GIL) has 77 per cent stake and Malaysia Airports Holding Berhad (MAHB) the remaining 23 per cent stake.
"Both Maldivian Airport Company Limited (MACL) and MoFT, pursuant to the notice issued on 27th Nov 2012 either directly or indirectly, are not allowed to interfere with the rights of the Investor (GMR-MAHB consortium) under the concession agreement," the statement said.
With this, GMIAL shall continue to operate the INIA airport as usual as per the provisions of the Concession Agreement, it added.
The MACL, based on the directions of the new Maldivian government, had on November 27 terminated the contract given to GMR in 2010 during the previous regime of President Mohamed Nasheed.
Maldivian President Mohamed Waheed had said the contract was invalid and was signed under "dubious" conditions by the Nasheed regime.
GMIAL had won the bid to build and operate the INIA airport for 25 years, which was extendable by another 10 years, post a successfully run International competitive bidding conducted by IFC, an arm of the World Bank in a most transparent and open manner, the statement said.
The company's plan envisages developing a 0.6 million sq feet integrated world class passenger terminal and increasing the terminal capacity to handle 5.5 million passengers per annum.
It includes a 20,000 square feet VIP terminal, apart from landside development and improving existing terminal.
The airport is situated at the Maldivian Hulhule Island at the South western tip of India.
India, which had reacted sharply to the termination, had in a high-level meeting reviewed overall relationship with Maldives.
The Cabinet Committee on Security, chaired by Prime Minister Manmohan Singh, took into account the developments surrounding cancellation of the contract and its possible wider consequences.
India had termed the termination decision a "very negative signal" to foreign investors.