Tribunal awards $270m over cancelled Maldives contract
India-based GMR Group has been awarded US$270m in compensation by a tribunial investigating the cancellation of an airport concession in the Maldives.
The arbitration case against the government of Maldives related to a contract carried out by GMR Male International Airport Limited (GMIAL), a subsidiary of GMR Infrastructure.
GMIAL had entered into a concession agreement with government of Maldives and Maldives Airport Company Limited (MACL) for modernisation and operation of Ibrahim Nasir International Airport (INIA) in 2010.
GMR said that the concession agreement was wrongfully repudiated by the government and MACL on 29th November 2012 alleging that it was “void ab initio”. After detailed proceedings, the tribunal has issued its final order awarding the compensation to GMIAL.
The three-member international arbitration panel awarded the compensation covering debt, equity invested in the project and a return of 17%. It also covers termination payments and legal costs and is net of taxes that GMIAL may be required to pay in the Maldives.
A GMR spokesperson said: “It has always been our firm belief that the cancellation of concession agreement by government of Maldives was wrongful. We are happy to note that the Tribunal has unequivocally upheld this stand and closed the adjudication with a final award of compensation.”
Earlier in June 2014, the arbitration tribunal had held that GoM and MACL had wrongfully repudiated the concession agreement of GMIAL and that they were jointly and severally liable in damages to GMIAL for loss caused.
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This article was published on 30 Oct 2016 (last updated on 30 Oct 2016).