Former President Mohamed Nasheed has claimed that the recent verdict by the Supreme Court of Singapore allowing the government to annul a development contract with infrastructure group GMR “justifies” the Maldivian government to “nationalise anything”.
Nasheed’s comments follow the handing over of Ibrahim Nasir International Airport (INIA) from GMR to the state-owned Maldives Airports Company Limited (MACL), after the Maldivian government voided the concession agreement.
Nasheed told Minivan News that the annulment was “very unfortunate” and highlighted that the government had “not only expelled the biggest foreign investment in the Maldives’ history”, but also created a “precedent” whereby nationalisation is acceptable.
“[The government] has created an avenue, or rather the verdict they got from Singapore Court, apparently justifies the government nationalising anything,” Nasheed added.
Prior to the eviction of GMR, arbitration proceedings were underway in Singapore over the contested airport development charge (ADC). GMR received a stay order on its eviction and appeared confident of its legal position even as the government declared that it would disregard the ruling and proceed with the eviction as planned.
On December 6, the Maldivian government successfully appealed the injunction in the Supreme Court of Singapore. Chief Justice Sundaresh Menon declared that “the Maldives government has the power to do what it wants, including expropriating the airport.”
Minivan News has learned that senior Chinese military officials landed at the airport in the tense week leading up to the handover, even as India warned of “adverse consequences” should the government proceed with forceful eviction. The government has continued to dismiss such claims.
When asked about claims regarding China’s potential involvement, Nasheed said: “I am not aware of any involvement from the Chinese, but what is being suggested is that the coup government seems to have strength, or seemsto get strength, from somewhere, from someone else.”
“In a sense, it is also sad that India has felt that appeasing bigots and appeasing racists and appeasing ultra nationalism is going to help them or this country,” Nasheed added.
President’s Office Spokesman Masood Imad responded to Nasheed’s comments, stating: “Nasheed is absolutely right, we have had some strength from another source. We have had British and Singaporean lawyers who found the contract to be ‘void ab initio’.”
With GMR having now been evicted from INIA, Masood stated that the Indian infrastructure giant and MACL were working “seamlessly together” over the airport hand over.
The verdict from the Singaporean Supreme Court effectively legalising the sovereign eviction of foreign investors regardless of contractual termination clauses or pending arbitration proceedings, was “completely unexpected”, according to one GMR insider – “the lawyers are still in shock”.
A last ditch request for a review of the decision was rejected, as was a second attempt at an injunction filed by Axis Bank, GMR’s lender to the value of US$350 million.
Following a meeting with its staff before the handover, GMR issued the following statement:
“In deference to the orders of the Court of Appeals, Singapore; GMR Male International Airport Ltd (GMIAL) will facilitate a smooth takeover of the Ibrahim Nasir International Airport (INIA) by the Maldives Airport Company Ltd (MACL), effective midnight tonight.
GMIAL has been assured that as a result of this takeover all its employees, suppliers and other interested parties will not be put to any inconvenience. GMIAL remains committed to finding a suitable solution to this situation. We are taking requisite steps to work out the compensation receivable from the Government of Maldives, keeping in mind the judgement of the aforementioned court and the concession agreement dated 28th June 2010.
All actions as above are without prejudice to our legal rights and statements made before various courts/tribunals where matters are currently being pursued or likely to be taken up.”
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OMG. Our ex-President is now confirmed a real idiot who interpret judgements by courts his way.
Seriously I am ashamed that this man became a President of my country once time.
Anni is absolutely right on this. We are idiots to allow this situation to happen. Say goodbye to the Maldivian economy, at least for non Chinese investments.
The Singapore Supreme Court's verdict should not come as a surprise to anyone. Legally, a sovereign state can do whatever it wants with its own resources.
There are a lot of precedents to this all over the world. For example, you can read about the Bolivian military's take over of its gas and oil fields from Petrobras: http://www.nytimes.com/2006/05/02/world/americas/02bolivia.html. Now, Brazil is a regional super-power, much like India is, in our region. However, that didn't bother the Bolivians from throwing out Brazil's largest energy company out of the country!
However, this raises a lot of problems from a future investment perspective. I quote Gal Luft, co-director of the Institute for the Analysis of Global Security, "When you cause problems for foreign investors, you cause problems for those who know how to create and develop the industry".
You have to remember that in throwing GMR out, the government never proved in a Court of Law, their claims about "void ab initio" of the contract. They simply used their sovereign right to do whatever they pleased with a national asset; which is something foreign investors will certainly be very keen to study.
It will be interesting to see how the relations between the Maldives and foreign investors play out in the future. It will be foolish to think this would not have any negative consequences.
GMR was probably looking exit from this troubled country. They never had a big plan to develop the airport in short period of time, their plan was to develop the airport from what they generate by running the airport but the political shift has put them in a position to haste the project in uncertain future, and they probably wanted this to happened and Waheed has just saved their face. But like tees maarkahn Wahhed became the hero in the land of fools.
I found it interesting to note Fazeel Najeeb's reference to Mauritius as an example to follow in terms of restructuring the Maldivian economy.
http://www.youtube.com/watch?feature=player_embedded&v=ktnFlvpEBMM
Fazeel fails to mention that Mauritius has very little in common with the Maldives in terms of its multi-cultural and multi-religious society, political stability, stable and mature legislature, geography, human resources, not to mention other factors.
Fazeel's point was that if Mauritius managed to successfully develop an offshore banking sector, then the Maldives should be able to do so. This is nothing more than day dreaming. Just take a look at the qualities where the two countries differ and try to address those first, before even thinking of such an industry as global finance.
You have to completely overhaul the entire legislature before international finance will even set foot here. Dare we say, "money laundering"?
I failed to add one of the key criteria for an off-shore banking jurisdiction:
"Offshore banks provide access to politically and economically stable jurisdictions. This may be an advantage for those residents in areas where there is a risk of political turmoil who fear their assets may be frozen, seized or disappear."
The highlights should be "politically and economically stable jurisdictions". Raise your hands with honesty if the Maldives qualifies as such!
Next one is asset seizure. Hmm, interesting I think.
We are back in the dark ages. Cave men.
That fellow Najeeb who comes from Fua Mulak does not have a proper educational foundation. As mature student he did a degree in economics and some how managed to get a doctorate degree in intellectual property law basing his research on Barbados. So how can he talk about monetary policy or fiscal policy of a nation.
Gasim is happy, he doesn't hacve to pay his $1,000,000USD fuel bill for his planes now that he owed GMR the AAA resorts will be next to be taken over.
Anni is the biggest lier that we have seen in this century.
GMR is not the biggest foreign investment in Maldives., There are many other bigger foreign investments in this country.
May be its the biggest investment that had given huge "cut" to him. If that is what he is talking about then it is true.
Look at HPL group from Simgapore and they have over 800 million dollars investment in malidves. Six sense group had over 500 millions, Centara group have over 500 million dollars investment , Joh Keels have over 500 millions, Aitken spence over 500 million , Minor group from Thailanf over 500 millions.
Don't talk bullshit and we know how much money Anni and his associates had taken from GMR deal.
And there we will stay, until war blesses our land once more.
Indian Exim bank is asking the Maldivian Government to pay 300 Million dollars, loan taken to evelop the airport
Paid To Comment gayoomists dont mention this. We have almost a billion dollars of debt.
Maldives is on the road to become no better than Burma after it was taken over by the Military.
This is manipulated gambling!
Mody - Largest SINGLE investment, not largest COMBINED investment.