Additional reporting by Mohamed Naahee
The Maldivian government has dismissed an injunction granted to GMR by the High Court of Singapore, and vowed that the airport will be run by the state-owned Maldives Airport Company Limited (MACL) by the coming Saturday (December 7).
The Singaporean High Court on Monday morning issued an injunction against cabinet’s decision the previous Tuesday to void the concession agreement for the US$511 million project, and issue the developer a seven day eviction notice.
Under the injunction, “Both MACL and the Ministry of Finance and Treasury, 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,” GMR said in a statement today.
The injunction prompted President Mohamed Waheed’s Special Advisor Dr Hassan Saeed, Defense and acting Transport Minister Mohamed Nazim and Home Minister Dr Mohamed Jameel to call a press conference on Monday shortly after midday.
“The government believes that the injunction issued by the Singapore court can be legally contested in a higher court. The government has decided to appeal the injunction as we believe the injunction lacks any grounds to stop the takeover,” said Hassan Saeed.
“I believe that the Singapore court interpreted the law wrong. We cannot wait for a hearing of the appeal. What I am saying is there is no damage to GMR but we face damages by not terminating the agreement,” Saeed said.
“The injunction did not overrule the government’s grounds that the contract was void from the beginning. Neither did it rule against the government’s grounds that the contract was frustrated. As you would know the Civil Court ruling over the ADC made the contract impossible to act upon,” said Saeed, referring to the airport development charge which his own Dhivehi Qaumee Party (DQP) successfully disputed in court while in opposition.
“This is a sovereign country. We have given them a sovereign guarantee. That means the government will compensate for their damages. An injunction cannot be issued like this to a sovereign state,” he continued.
Defense Minister Nazim meanwhile pledged the government would “continue the airport takeover and Insha Allah from next Saturday onwards MACL will be running the airport.”
“The government remains firm and committed towards implementing its decision to terminate the agreement. We will not reconsider it,” he said.
Following the government’s decision to declare the contract void last week, the Immigration Department announced it was halting the renewal of work permits for foreign nationals associated with the project, immediately affecting 17 of the airport’s 140 foreign staff.
The Civil Aviation Authority (CAA) meanwhile informed GMR that it would withdraw the operator’s aerodrome certificate at 23:59 on December 7.
GMR’s Head of Corporate Communications Arun Bhaghat reiterated to Minivan News that the company had no intention of leaving.
“It is not our intention to leave. We hope the government will act according to the law and respect the legal formalities,” he said.
Spokesperson for the International Air Transport Authority (IATA), Albert Tjoeng, told Minivan News that it was the organisation’s understanding that the airport owner “remains unchanged – it is still the Maldives government. What is changing is the operator of the airport.”
“The priority is to ensure uninterrupted operations at the airport, with no degradation in safety, efficiency and quality of service,” Tjoeng said.
“It is the responsibility of the civil aviation authority to regulate safety at the airport. While this is a commercial matter between the government and the airport operator, it should not lead to cost increases for airlines operating to the airport.”
Lawyer acting for GMR, Fayyaz Ismail of Aequitas Legal Consultants (ALC), told Minivan News that if the government failed to comply with the injunction, “the Maldives will no longer be respected as upholding its obligations under international law, which will be very detrimental to future foreign investment. Hopefully they will be reasonable.”
Former President Mohamed Nasheed, under whose administration the contract was signed, declared that “President Waheed cannot ignore international law at his whim and fancy. Rules are rules and they must be respected.”
Lenders write to MACL
Axis Bank, one of the main lenders to the airport development project, has meanwhile sent a letter to MACL dated November 28 in which it reminded the government that the Finance Ministry was the guarantor of the direct agreement “in which the guarantor has undertaken and irrevocably guaranteed to pay any sums due… as a separate and independent obligation notwithstanding any termination of the concession agreement by the grantor or the project company for any reason whatsoever.”
“As a sovereign undertaking by the Republic of Maldives, we are sure that the Ministry of Finance and Treasury shall honour the aforesaid guarantee to repay the Finance Parties, notwithstanding the grounds on which the Ministry has declared he Concession Agreement as void, which has the consequences of terminating the Concession Agreement,” the bank wrote.
“We fear that the taking over of the airport without setting the dues of the Finance Parties shall be detrimental to the interests of the Finance Parties and shall go against the spirit of foreign investment in developmental projects of the Republic of Maldives.”
India considers withdrawing aid, withdraws representative
Indian media has meanwhile reported that the Indian government is considering freezing aid to the economically-crippled archipelago, notably a US$25 million loan necessary for the payment of civil servant salaries and the construction of a police academy.
“We are not happy with the way Maldives cancelled the GMR airport deal. This has surely left an impact on our bilateral ties,” a foreign ministry official told AFP. “A decision whether the money should be given or not will be taken soon.”
However the Indian High Commission told newspaper Haveeru that the suggestion was “unofficial” and that such a decision would not be “unilateral”.
Indian media also reported that High Commissioner D M Mulay had been appointed Indian Consul General in New York, and is to be replaced by Rajiv Shahare.
President’s Office Spokesperson Abbas Adil Riza had described Mulay as a “traitor and enemy of the Maldives and the Maldivian people” during a rally on November 9 calling for the government to “reclaim” Ibrahim Nasir International Airport (INIA) from GMR.
The remarks were widely reported by Indian media, sparking a diplomatic row and forcing the President’s Office to issue a statement distancing itself from the comments.
However Riza subsequently stood by his comments spoke at a second rally, characterising the Indian media coverage of his remarks as a “success” and urging participants to persevere “until GMR leaves this country.”
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Former President Mohamed Nasheed declared that “President Waheed cannot ignore international law at his whim and fancy. Rules are rules and they must be respected.”
This from the same man who ignored the very constitution he had sworn to uphold. Yes Mr President, rules are rules. But only some should follow it huh? That's proven on a daily basis by the political leaders and businessmen of this nation. What a load of crap.
All the Anni need to do now is to get his friends GMR to buy 9 members. Then Waheed is out and Anni can be president again.
No court order can force the Maldives Government to keep on paying GMR at a loss to the government from this treason committed by Former Chaotic & corrupt leader Nasheed. Period!
So now Hassan Saeed thinks the Singapore Court doesn't know what they are doing eh. Haha! As long as everyone concludes all matters the way they like, then others make sense, otherwise they don't, be it the Commonwealth or Singapore eh. No wonder Hassan Saeed has never been able to come close to Presidency. And no wonder President Nasheed decided not to accept this idiot's advice, today we are in this dire situation when lunatics like hassan saeed and waheed get together!!!
"I believe that the Singapore court interpreted the law wrong. We cannot wait for a hearing of the appeal".
There is no need to justify.
Simply say that we are right, anyone who is not agree with us is wrong!
We love our dear president Anni. We are with GMR because the people's president Anni is supporting GMR. We are willing to give the airport to them even if we have to pay the ADC from our pocket. And even if it means we have to go with just one meal a day. We will pay the money to GMR. We love our deal leader Anni so much. We will die for our president!
It really surprises me the way governments take decisions unilaterally. Decisions such as these will surely affect foreign investors confidence. Remember how foreign investors started evading India when Govt forced certain tax related regulation retrospectively. I must also mention that economically India is strong enough to survive such consequences, albeit hurting its growth prospects up to a certain level. Is Maldives strong enough to survive? Maldives govt. needs to understand that their country will perhaps loose more in long term than short term gains which they may reap from this decision.
the people of maldives have a negative opinion of GMR..waheed is playing with their emotions to win votes by kicking out GMR..by doing so he shall most likley come back to power in 2013..on a long term if this airport is caught in litigation in international courts there shall be no invester willing the take the operations of the airport..MACL shall then start running it in the same shabby way they have been doing earlier..this will affect the tourism industry in the country and overall the nations economy shall suffer..a clear case of self centred politics of a third rate leader..i pity the people of maldives and hope wisdon shall prevail..
Ilyas Ahme & Rasheed: are you guys talking from your arse? It is the incompetent Hassan Saeed's fault that MACL had to end up paying ADC. After taking the issue to court Even though the Golhaa backed civil court ruled that there is no law, it would have taken just one day to pass a law to collect ADC. So don't blame Anni for the mistakes of the coup leaders. Get your facts straight before you open your mouth to avoid looking like complete idiots
You can be sure that the "short term gains" come in the form of kickbacks to the current government from their new best friends, the Chinese. Is it just a coincidence that China have approved the loan millions of dollars and are now going to be the ones to gain new contracts here to build this new airport? Corruption is everywhere in this country. Sad, but not surprising. It will be decades before this country, that lives many years in the past, will ever be a truly democratic society. Everyone's out for themselves and pushing the country deeper into the dark ages.
The only reason why Anni (or former President Nasheed) is able to talk is due to GMR backing. That man has only marginal support and he is putting all bets on GMR to re-elect him.
Maldivains know the role GMR plays in Maldivain politics and that is why GMR will not have a chance here. Nasheed will fall with GMR and that is why an ex president is fighting the fight of a foreign investor. Shame.
The MACL can not run a tea party let alone an international airport. Back to the dark ages we go. Hassan Saeed thinks he can over rule international law. Laughable. The ruling elite want to take all the profits from an old system and curruption again.
The Gov only has $140M is cash reserves which is pea-nuts for a country, probably one of the lowest in the world, now they have to re-pay Axis (GMR) the $240M they have invested building the new terminals. A square does not fit into a round hole of a smaller size, this is basic physics you idiots.
“I believe that the Singapore court interpreted the law wrong. We cannot wait for a hearing of the appeal”.
There is no need to justify.
Simply say that we are right, anyone who is not agree with us is wrong!
Hassan Saeed reminds me of Saddam's notorious Information Minister, i.e. Muhammed Saeed al-Sahaf, who famously declared that there were no tanks in Baghdad, as American armour came thundering down the road.
It looks like Saeed and his pals have bitten more than they can chew, this time around. I dare the disgraced ex-Colonel Nazim (who was expelled from Sandhurst) to take over the airport and throw out the Indians. Let's see what this chap is made of...
India may be acting quietly, but Saeed & Co should not underestimate that quietness. Maldives stands to lose much. All foreign investors are now on notice that they may get thrown out at any time, with total disregard to commercial law and contractual obligations.
Its really detrimental for Maldives as it will impact the perspective FDI in the archipelago, ridiculous that Govt takes such decision without taking another party in trust.
foreign policy should be clearly defined for both the countries. Just by politicising the business may not useful for any country in long run. this may impact the common man livilihood at last. Please make system correct wherever its repaired.
President Nasheed escaped the premeditated strangling attempts his government by the then opposition and brought GMR to generate wealth manifold as compared to MACL's records of income. What about the no cost brand new international airport to boost tourism and business. GMR would of course make immense profit so would the Maldives and the people.
there are great guys in the Maldives. their greatness depends on stopping commercially beneficial projects so that people remain in the same condition. Great guys! Power to stopping the whole country could be much better! wow!
This has nothing to do with void or unfair contract.
The issue is Gayooms wife has business interest in the Airport; she operates cafes, duty-free shops in the airport.
One other interest is Under Gayoom dictatorship state companies acted as money lenders to gayooms family and his friends. All they had to do way issue a cheque dated cheque in USD (hundreds of Thousands) and take Maldivian Rufiyaas in Millions
This how Yaameed Abdul Gayoom purchased the STO tea plantation for his brother in law, took rufiyaa cash from STO giving dated cheques, gave the STO cash to sto and to take over STO’s srilankan tea plantation.
They want to kick out GMR caz if GMR stays they wont be able to rob Maldives.
Somebody should ask this government why they are enjoying the benefits that were signed for Maldivian people in Anni's Government
And why are they withdrawing loans based on that
If they feel they are doing good then they should stop all the nonsenses which will lose money for us (Maldivians) and we will go back to 1960's where we have to wait for ships to pass this country for food and sell all our belongings
People wake up let us kick the traitors
When this country is getting spoiled of prostitutes from other countries doing business no body is bothered but when someone is doing good they feel we have lost everything
Is money earned from beauty parlours by encouraging illegal activities by these MP's is more benefit in our law
A drastic and immature decision can make a drastic EFFECTS and CHANGES in each and every individual of this country.
I hope the decision makers had read their lessons and understand it very well before moving one more step forward.
As the step may seem to be going forward but may lead you BADLY falling back...
"I believe that the Singapore court interpreted the law wrong.",
Hassan Saeed! You are just one of a kind! OMG!
I can understand why Anni did not take Saeed's advice! I am sure Anni saw where Saeed had his brains!