Month: August 2013

Parliament passes prison and parole bill

The ‘Prison and Parole Bill’ has been passed by Parliament for a third time, after being returned twice for reconsideration by President Mohamed Waheed, reports local media.

The bill was unanimously passed today (August 29) with the 28 points Waheed previously requested be reconsidered having been reviewed and amended, MP Moosa Manik told local media.

The bill currently has “no major issues,” he added.

The bill aims to strengthen the prison system, which will enable government authorities ensure inmates’ rights and privileges are protected, said Manik. Vocational training and creating a safe and secure environment for inmates will also be provided.

In addition, the ‘Prison and Parole Bill’ will establish a separate institution, referred to as the Maldives Correctional Service, to create prison regulations and run the facilities.

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Supreme Court holds first hearing into case filed by PPM official against Elections Commission

The Supreme Court has held the first hearing into a case filed by Progressive Party of Maldives (PPM) Appeal Committee Member Ahmed Zaneen Adam against the Elections Commission, contesting its credibility ahead of the scheduled Presidential Elections.

On Monday, Zaneen filed a case at the Supreme Court requesting it order an audit of the commission’s IT systems through an independent IT auditor to “ensure they are credible”.

Presenting his case today (August 29), Zaheen claimed that he had filed the case as a “Public Interest Litigation” case based on three grounds.

The first point – founded upon two articles written on local newspaper Haveeru, one article titled “Elections Commission’s server under continuous attack” and the other titled “Haveeru’s web developers concerned over security of Election Commission’s IT system” – Zaneen claimed that it was necessary in a world where “powerful states are trying to control smaller states” to conduct an independent audit on the Elections Commission’s IT system for security breaches.

In his second point, the PPM Appeal Committee member contested that an extraordinarily huge amount of forms had been submitted to the Elections Commission when it had opened its voter re-registration.

Voter re-registration is required by law, should a person such who is voting in an island which he/she is not originally registered in such as a student from an island studying in Male and Maldivians residing abroad.

Zaneen claimed that the public was very concerned regarding the number of forms submitted for re-registration and pleaded the Supreme Court to order the Elections Commission to have the final voter list of all ballot boxes sealed and signed by all political party campaign agents, before being sent to polling stations.

On the third point, he requested the Supreme Court rule that the security services, the Maldives National Defence Force (MNDF) and the police have a legal mandate to oversee the election process and vote counting process to ensure that security is maintained throughout the process.

Responding to the case, Head of the Elections Commission’s legal team, former Attorney General Husnu Al Suood, contested that Zaneen’s case lacked any legal grounds and that he had filed a case requesting preventive measures from Supreme Court based on his personal concerns and doubts.

Suood further challenged that as Zaneen was not a candidate in the presidential elections, he did not have the legal capacity to file such a case and requested the court dismiss the matter.

Responding to the first and second points, Suood argued that Zaneen had not followed the due process in filing his concerns, claiming that the Elections Commission had set up the National Elections Complaints Bureau (NECB) to hear complaints and the law allowed an appeal to be filed at the High Court, should a person feels discontent about the bureau’s decision.

Suood also argued that the final voter list used by the Elections Commission was a physically printed list and that it had nothing to do with the data stored on the server of the elections commission, claiming that no online security breach could possibly influence the outcome of the vote.

He also said that the physical list was a verified and error-checked list that had the seal and signature of three members of the Elections Commission.

Responding to the third point, Suood claimed that under the constitution, the Elections Commission had sole authority to conduct and hold elections and would operate independently. The role of the security services, Suood contended, was to assist the Elections Commission throughout the election process.

The former Attorney General also claimed that a presidential election conducted under the watch of the military would not be seen by the democratic world as a free and fair election.

Summing up his response, Suood told the seven-member Supreme Court that it was not sensible to carry out a case filed against the Elections Commisson based on an individual’s personal perception and needlessly create doubt over the election’s credibility.

Meanwhile, the members of the opposition Maldivian Democratic Party (MDP)’s legal team – who had been able to intervene at the last minute – echoed similar sentiments to Suood, contending that should the Supreme Court issue an injunction based on a case filed on personal perception and doubt, it would destroy all constitutional and legal principles established in the constitution and law.

The MDP’s legal tea,m headed by former Solicitor General Ibrahim Riffath, added that it was saddening and deeply regrettable to see a case filed against the Elections Commission that did not have any written evidence to support itself, or even grounds of proof required in a civil case.

Riffath also contested that it was the constitutional duty of the Elections Commission, and not the security service, to enforce the law concerning elections and voting. He added that the constitution explicitly states that independence of independent institutions must be ensured at all times.

Today’s hearing – heard by the full seven member bench of the Supreme Court – was adjourned but the judges did not state when the next would be scheduled.

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Personal issues creating JSC tension as Majlis committee unprepared to deal with “out of control” judicial watchdog

Tension continues to surround the Judicial Service Commission (JSC) as the chair and a fellow commission member accuse one other of code of conduct violations, while members of Parliament’s Independent Institutions Committee is have alleged it is unprepared to deal with the situation.

“The JSC is out of control right now, we must do something. The JSC president is ‘out of the circle’,” Parliament Independent Institutions Committee Member and MDP MP Ahmed Sameer told Minivan News today (August 29).

Last week, the JSC Chair and Supreme Court Justice Adam Mohamed was set to face a no-confidence vote introduced by fellow commission member Shuaib Abdul Rahman. Rahman claimed the JSC Chair had been abusing his powers by exerting undue influence on the commission’s decisions and that the entire JSC was in a state of limbo.

However, Adam Mohamed refused to table the no-confidence motion against himself, claiming that it would be in violation of the Maldives’constitution and the JSC Act.

In reaction to Mohamed’s refusal to table the motion, Rahmaan submitted a case against the chair to parliament’s Independent Institutions Committee, as well as to the Anti-Corruption Commission (ACC).

This prompted the JSC Chair to file his own cases with the parliamentary committee and the ACC, requesting they penalise Rahman for breaching the JSC’s code of conduct. Mohamed claims that an internal JSC motion cannot be referred to any outside parties.

While Sameer today acknowledged that “there are a lot of issues arising from the JSC”, he explained that the parliamentary committee was not yet able to address them.

“The committee has not formed officially yet. We have to select a chair and deputy chair, then official work can begin,” said Sameer.

He anticipated that the parliamentary committee members will “hopefully” be chosen by next Monday or sometime later in the week.

Once the Independent Institutions Committee is officially formed, they will then hold an emergency meeting to address the urgent JSC issues, noted Sameer.

Meanwhile, though the JSC claims to be functioning as normal, the tension between Mohamed and Rahman is said to be palpable.

“From the standpoint of the Commission, this is a personal issue between President and Shuaib [Abdul Rahman], it is not something related to the JSC,” JSC Secretary General Aboobakuru Mohamed told Minivan News today.

“As staff of the Commission, we are not taking sides.”

He explained that “the JSC Chair is circulating press releases on behalf of himself, not the commission”, and that both Mohamed and Rahman are referring to the same articles in the JSC code of conduct.

“We had a JSC committee session yesterday and things were as normal, there were no personal grudges [affecting work] during the session,” said Aboobakuru Mohamed.

“It is definitely not affecting work. [However] the atmosphere yesterday was tense, we definitely feel the tension there,” he added.

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Immigration Department denies vital components missing from replacement border system

The Department of Immigration and Emigration has rejected accusations that a replacement border control system provided by US authorities will not be fit for purpose without “enhancements” currently being made to the technology.

An immigration source speaking on condition of anonymity last week told Minivan News that the Personal Identification Secure Comparison and Evaluation System (PISCES) – provided free of charge by the US government – was not an adequate replacement for the previous system provided by Malaysia-based Nexbis.

The PISCES system would only provide one of several functions afforded by the “total solution” installed by Nexbis under an agreement recently scrapped by the government, alleged a local source experienced in working with both border control systems.

“Nexbis provided a total solution that not only allowed for checking of biometric data, but would also be used to process visas and work permits,” the source claimed at the time.

Enhancements underway

Chief Superintendent of Immigration Zubair Muhammad today confirmed that enhancements were continuing to be made to the functionality of the PISCES since its installation as a direct replacement for the Nexbis system earlier this month.

Asked for more details on the nature of changes being made to PISCES, Zubair responded that a press conference had been scheduled for Sunday (September 1) at which representatives from the Ministry of Defence, the National Centre for Information Technology (NCIT) and immigration officials would discuss the ongoing work.

He also declined to provide details on whether any Immigration Department systems would have been affected by the changeover from the dismissed Nexbis technology at the present time.

Immigration Controller Dr Mohamed Ali meanwhile declined to comment on the PISCES technology when contacted today, and Defence Minister Mohamed Nazim had not responded at the time of press.

Nazim earlier this month claimed that both US and local authorities were continuing to develop PISCES since its introduction at Ibrahim Nasir International airport (INIA) to ensure it could meet the technical criteria required by immigration officials in the country.

“During training [to use the system], we realised that we needed to do enhancements,” he said at the time.

Asked if the country’s border controls could be open to abuse while these enhancements were being implemented, Nazim had responded that several amendments were expected to have been completed over the last week.

Immigration Department Spokesperson Ibrahim Ashraf at the time said that the country’s border controls had been transferred from Nexbis’ technology to Pisces without many issues.

He added that PISCES was nonetheless reliant on data from the Nexbis system, with technical staff from the Malaysian firm and the immigration working on transferring the necessary information.

Nexbis agreement

Nexbis’ border control system, used at Ibrahim Nasir International Airport (INIA) since September 2012, was replaced on August 20 following the government’s decision to terminate its concession agreement for the use and management of the system.

Nexbis has rubbished the Maldivian government’s reasons for terminating their agreement to build and operate a new border control system, accusing human traffickers – fearful of a more comprehensive system – of being behind the decision.

In June, the Maldives was placed on the US State Department’s Tier Two Watch List for Human Trafficking for the fourth consecutive year.

The PISCES system, designed by US tech firm Booz Allen Hamilton, has already been implemented in numerous other countries around the world, including Pakistan, Afghanistan, Iraq, and Thailand.

Nexbis’s statement also took issue with Defence Minister Nazim’s claims that the installation of its system was causing “major losses” to the state – this claim was reported in local media on August 6 when the Malaysian company was informed it had 14 days to vacate the country.

The company argued that its system was also installed and operated free of charge, and that the US$2.8million it had billed the government was the amount due for the arrival and departure of foreigners as per the original agreement.

The Nexbis deal has been dogged by allegations of corruption since it was agreed under the government of former President Mohamed Nasheed in 2010.

The failure of the Anti-Corruption Commission (ACC) to conclusively prove foul play in this respect has exonerated Nexbis from such charges, the company has claimed.

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Development pointless without peace, freedom and happiness: PPM Yameen

The Progressive Party of Maldives (PPM) presidential candidate Abdulla Yameen has told the population of Kudahuvadhoo that development is “pointless if people can’t relax.”

“The end result of all this effort, of constructing harbours, and sending our children to school, should be to ensure that people can relax and live in peace, happiness and freedom. Otherwise there’s no point in doing all this,” Yameen was reported as saying during a campaign rally.

The PPM candidate is also said to have urged voters to say no to politicians who disturb the peace and make unrealistic promises.

Yameen’s comments echo his prior argument that the worst kind of extremism in the Maldives is the encroachment on other people’s rights.

The comments follow the Maldivian Democratic Party’s (MDP) pledge to implement 137 development projects worth MVR 30 billion (US$1.9 billion) over five years by the PPM’s primary opponent.

In the party’s detailed ‘Costed and Budgeted’ manifesto, former President – and current candidate – Mohamed Nasheed explained that the manifesto included 51,000 job opportunities, a savings scheme for higher education, a student loan scheme, a MVR2000 (US$129) allowance for every single parent and person with special needs, and an allowance of MVR2300 (US$149) for the elderly.

Nasheed also pointed out the importance of introducing a development bank in the Maldives.

“Take a look, this manifesto will not contain even a single policy which has not been accounted for. Even if we are asked to submit a budget to the parliament by tomorrow, we are ready to do so,” Nasheed told a crowd of 8,000 on Saturday (August 24).

The current government’s  – of which the PPM is a partner – decided to suspend development projects this year after the state was found to have exhausted its annual budget for recurrent expenditure (including salaries, allowances and administration costs) in the first quarter of 2013.

President Dr. Mohamed Waheed Hassan has blamed the current economic situation on the excesses of the Nasheed government.

The decision was made in same month that currency reserves in the Maldives were found to have “dwindled to critical levels”, according to the World Bank’s biannual South Asia Economic Focus report.

Criticisms made by Yameen in Kudahuvadhoo were also addressed at the MDP rally earlier in the week, with Nasheed railing against politicians who campaign by promising gifts to certain individuals and communities.

Jumhoree Party (JP) candidate Ibrahim Gasim has come under fire from both the MDP and the PPM this week, with PPM spokesman Ahmed Nihan describing the JP’s campaign as effectively “dumping money” in certain parts of the country.

Former President Maumoon Abdul Gayoom also travelled to Kudahuvadhoo as the campaign entered its final ten days. The PPM leader told the island’s people that the “shattered” economy could only be mended by his half-brother Yameen.

“Our economy is seriously damaged and destroyed. This is not the way it should be, and this is not how it was before either,” said Gayoom.

After succeeding Gayoom, Nasheed was said to have inherited “the most challenging macroeconomic situation of all democratic transitions that have occurred since 1956”, according to the World Bank.

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Palestinian refugees who fled to Maldives granted asylum in Sweden

Four Palestinian refugees who arrived in the Maldives on 9 July 2013 have left the Maldives after being granted asylum by Sweden.

In a statement the Maldives Foreign Ministry said it had made a decision not to repatriate the family following an appeal from the United Nations High Commissioner for Refugees (UNCHR), which facilitated the family’s application for refugee status.

The family initially fled Palestine to Syria, but were compelled to leave due to escalating conflict in the country.

“The [Maldivian] government took care of the welfare of the family, including providing them accommodation at Hulhulé Island,” stated the Foreign Ministry.

The family initially arrived in the Maldives on a flight from Dubai with a “questionable” travel document supplied by Syrian authorities.

The foreign ministry at the time noted that under local laws, individuals travelling to the Maldives with false documentation were to be refused entry to the country.

However, the ministry said it had been informed by the UNHCR on July 14 that the family were believed to be registered as refugees. The family has also told government authorities that they are listed with the United Nations Relief and Works Agencies for Palestine Refugees (UNRWA).

“Upon receiving request from UNHCR, the ministry intervened and requested the Department of Immigration and Emigration to allow the family to remain in the Maldives, as returning the family from the same route as they came in would leave to high probability of the family being returned to war-torn Syria,” read the previous foreign ministry statement.

“[Returning the family to Syria] is not acceptable to the government of the Maldives.”

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Comment: The Maldives – a case study in contemporary diplomacy

This article was originally published on UAE Diplomacy. Republished with permission.

The Maldives is normally known for beautiful beaches and breath-taking blue sea. But these days it also brings up for a highly interesting case study in diplomatic law and contemporary diplomacy. A friend drew my attention to a recent court ruling on a case in which the Indian High Commission in Maldives failed to comply with its contractual duties as per the rent of its mission premises. According to a local newspaper article, the private landlord took the issue to the civil court which, in the first instance, rejected the claim due to a lack of jurisdiction. While this is not surprising, the court’s reasoning is. The Maldivian Civil Court ruled that it could not look into the matter because the Vienna Convention on Diplomatic Relations (VCDR) included immunity for diplomatic missions and diplomatic agents.

Jurisdiction is always a tricky notion as the term itself is not always clear. Sometimes it refers to territory (custody) only, however, most of the time it can be likened to power exercised by a state over persons, property or events. So, when a Court rejects the power of jurisdiction, it is probably that it does not consider itself the correct authority to legislate in respect to the issue of the person, property and event. Referring to the current case, it will mean that the Civil Court has decided that it is not in a position to make a judgement on the President of India, who was acting on behalf of the Republic of India. Generally-speaking, diplomatic missions and personnel enjoy certain privileges and immunities to carry out their duties or for the representation of their government. While diplomatic privileges and immunities have a long tradition, they were codified in 1961 by the Vienna Convention on Diplomatic Relations (VCDR).

The VCDR regulates diplomatic privileges and immunities of diplomatic missions and its agents but has little to say on civil proceedings and matters with private subjects of international law. It primarily regulates aspects of state to state relations but not the relations with international organizations, let alone private entities or individuals. The VCDR touches, for instance, in Article 21 on the obligation of the receiving state to assist in obtaining suitable accommodation (being bought or leased). In Article 23 it states that the head of mission is exempt from dues and taxes in respect of the premises of the mission and through Article 31 the diplomatic agent receives immunity from execution (measures concerning his/her personal inviolability). Interestingly enough, subparagraph 31.4 says that the immunity of a diplomatic agent from the jurisdiction of the receiving state does not exempt him from the jurisdiction of the sending State.  In other words, and this is the only connection to the Civil Court’s ruling, without a waiver of immunity, civil proceedings against a  diplomat can only be taken in his home country.

Unsatisfied with the Civil Court’s ruling, the private landlord appealed –with quite considerable success. On 21 August, 2013 the High Court ruled in favour of the private, Maldivian landlord. In its judgment the High Court found that ‘Maldivians are not required to follow the VCDR as there is no national legislation enforcing the regulations of the convention’ (see linked newspaper article). This decision is based on the Maldivian Constitution, which stipulates in Article 93 that citizens shall only be required to act in compliance with treaties ratified by the state AND provided for in laws enacted by the parliament.

Now, there are several ways international law can be aligned with domestic law. One way is for the constitution to comment about it in a general way. For instance, the German Constitution provides a hierarchy of law, putting constitutional law first, then provisions of international treaties and then other national or federal regulations. Sometimes, when there exists international conventional law, this can interfere with national laws. As a result, states are required to legislate, meaning that they adapt to international standards or, if the terms of the international convention are not acceptable, the country in question will not ratify the convention (approval by the parliament or any other appropriate legislative body in the country).

In the current case, the Constitution of the Maldives refers a mere 12 times to international law without establishing any kind of hierarchy nor giving any specific hint as to how international law needs to be integrated in relation to national law. The closest it comes to is in Article 93 which states that ‘Maldivian citizens shall only be required to act in compliance with treaties ratified by the state and provided for in laws […].’ In this case, there appears to be an absence of clear national legislation in reference to the Vienna Convention on Diplomatic Relations, which the Maldives ratified back in 2007. Looking at other Commonwealth Nations such as the United Kingdom, we will find the Diplomatic Privileges and Immunities Act of 1964 (the year the VCDR came into effect). This Act regulates the application of the VCDR, going into detail about potential extensions or interpretations of the articles.

While there is obviously a need for national legislation in the Maldives to clarify its position on the provisions of the VCDR, it is arguable whether this convention is relevant, at all, to the current problem. The case we have here is a situation in which a private, Maldivian individual is filing a law suit against the President of India, who was acting in the rental agreement on behalf of the Indian people. However, as stated in its preamble, the VCDR is a convention between states. Therefore, it falls into the category of public international law but has little relevance to private international law. Meanwhile, cases in which private individuals file a law suit against states do occur every now and then, these cases fall into a certain category which is internationally codified, inter alia, under the United Nations Convention on Jurisdictional Immunities of States and Their Property. While this convention was negotiated in 2004, it still has not achieved the necessary minimum number of ratifications in order to come into force. Most developed states have domestic laws regulating state immunities. For example, in the US such a law is called ‘Foreign Sovereign Immunities Act’. It stipulates that foreign governments are immune from suit in the US (state and federal courts) unless the claim falls within certain exceptions. Such exceptions include when a statesperson acts in a private capacity or is engaged in private business activities.

From the above we can draw a number of conclusions. First, the VCDR has little relevance to the case in question. It does not deal with private international law but mainly deals with matters between states and the granting of diplomatic privileges and immunities to its permanent diplomatic missions and personnel. Second, both court rulings are based on interesting justifications due to a lack of national legislation in the field of diplomatic privileges and immunities, as well as regarding the area of state immunity.  Building up to this, I would like to take up the cudgels for the Maldivian Courts. While the underlying case shows that the VCDR is partly incomplete and in some detailed aspects antiquated at best, it begs the question, are the courts of a relatively inexperienced and small country such as the Maldives to know about these details? Both courts probably had no independent experts at hand nor would the argued amount of money (US$200,000) justify a very detailed background research. Hence, the lack of clarity of the situation (why the Indian High Commission ended the rental agreement prematurely), and the fact that the High Commission would enjoy diplomatic immunities (inviolability of mission premises, immunity of diplomatic personnel) would have made investigations difficult and tedious. The take away message is that the Maldives might want to look into some vital legislative actions in order to incorporate and align international law with domestic law. This would lead to more transparency and clarity for future rulings.

Kai Bruns is an Associate Professor at the American University in the Emirates. He holds a PhD in the field of Diplomatic Studies – his doctoral thesis focused on the negotiating process leading to the 1961 Vienna Convention on Diplomatic Relations (VCDR).

All comment pieces are the sole view of the author and do not reflect the editorial policy of Minivan News. If you would like to write an opinion piece, please send proposals to [email protected]

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Senior PPM official files Supreme Court case against Elections Commission

The Supreme Court is to hold the first hearing into a case against the Elections Commission (EC) filed by a senior member of the Progressive Party of Maldives (PPM).

PPM Appeal Committee member Ahmed Zaneen Adam filed a case against the EC with the Supreme Court on Monday (August 26), requesting the court order an independent audit of the commission’s IT systems to “ensure they are credible”, and to order state security forces to “ensure the election does not face any undue influence”.

Adam claimed the case was filed in his “personal capacity” and not on behalf of his party – who have denied knowledge of the case.  The opposition Maldivian Democratic Party (MDP) has disputed this claim.

Adam’s submission also requested the court determine whether the voter re-registration process had been conducted fairly, and asked the court to order the EC to place a copy of the original electoral register – signed by all presidential candidates – in all polling stations.

The Supreme Court has accepted the case and scheduled the first hearing at 2:00pm on Thursday (August 29).

“I have not been informed whether the party has submitted a case to the Supreme Court concerning the competency of the Elections Commission’s work,” PPM MP and Spokesperson Ahmed Nihan told Minivan News today.

Nihan claimed that the party was cautious of backing any action that could compromise the election scheduled for September 7.

“I certainly believe that we do not want to take any action that would halt the election. We have to be very careful going forward,” he said. “We will have to wait to see if anything is submitted.”

The Supreme Court hearing follows a series of recent complaints against the EC issued by both the PPM and Jumhoree Party (JP).  The PPM claimed last week their concerns had gone “unaddressed” and they would seek a legal resolution against the Commission.

PPM vice presidential candidate and former Home Minister Dr Mohamed Jameel Ahmed is heading the party’s legal team concerning the issues it has raised against the EC.

PPM trying to delay elections: MDP

“The PPM wants to delay elections or have the Supreme Court intervene to do so,” said MDP Spokesperson Imthiyaz ‘Inthi’ Fahmy.

“I haven’t seen PPM conducting nationwide campaigning. They just started conducting door to door campaigning two weeks ago,” Fahmy continued. “They are delayed or not ready for elections at all.”

Fahmy alleged that the PPM would have known Adam was filing a case against the EC and that Adam would not have acted without the party’s consent, given his leadership role.

“As a member of PPM’s Appeals Committee, he would not have taken action without the PPM’s consent and approval,” he said.

“If Adam were a member of an MDP committee and wanted to take legal action in a personal capacity, the party would not allow that,” he added.

Fahmy said be believed the PPM would not succeed in delaying the presidential election considering the EC was constitutionally established as an independent commission and had successfully carried out every democratic election in the country since its inception.

“The Commission has already set the date for elections, all the preparations have been made, the voter registry list has been completed, and political parties – especially the MDP – are ready for elections,” he noted.

“The Supreme Court should reject the PPM case because it is not within their mandate to stop elections, they should not intervene,” Fahmy continued.

“People all over the Maldives are ready for the election. If something unexpected happens it will be a really big issue that people will not accept at all. I don’t think the Supreme Court will take that action,” he added.

MDP to enter the fray

The MDP today submitted a petition to the Supreme Court to join the case as a third party. However, the court rejected this application due to a “technical problem”, Fahmy stated.

He explained that the court had asked for more details in the paperwork, despite the documents submitted by the PPM not being provided.

The MDP’s legal team plans to re-submit the appropriate paperwork tomorrow morning in a process one party lawyer said can be completed in minutes.

“We will submit our application to join the case as a third party tomorrow morning. MDP not only has an interest in the case, but a jurisdictional right to join the case,” he continued.

“There are no grounds for the PPM to question [the EC’s work] by submitting a case against them. They have conducted their work and dispersed information very transparently,” he added.

Elections Commission Chair Fuwad Thowfeek and Vice Chair Ahmed Fayaz, and PPM vice presidential candidate Dr Mohamed Jameel Ahmed had not responded to requests for information at time of press.

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Arbitration tribunal in GMR hearing agrees separate assessment of liability

The GMR-Malaysia Airports Holdings Berhad (GMR-MAHB) consortium has won an early legal skirmish in the Singapore-based arbitration hearings into its US$1.4 billion compensation claim for early termination of its contract by the Maldivian government.

GMR-MAHB won a concession agreement to manage and upgrade Ibrahim Nasir International Airport (INIA) under the Maldivian Democratic Party (MDP) administration, which was ousted from power on 7 February 2012 amid protests and a police mutiny.

The new government, comprising a coalition of former opposition parties under current President Mohamed Waheed, declared in late 2012 that GMR-MAHB’s agreement was ‘void ab initio’ (invalid from the outset) and gave the developer seven days’ notice to leave the country.

The US$511 million agreement was at the time the country’s single largest foreign investment. According to the government’s own engineering assessment, the development was 25 percent complete at the time GMR-MAHB was evicted.

The consortium has since lodged a US$1.4 billion claim with the Singapore Court of Arbitration, an amount eclipsing the Maldives’ annual state budget. The government is being represented by a Singapore National University Professor M. Sonarajam, while GMR-MAHB is being represented by former Chief Justice of the UK, Lord Nicholas Edison Phillips. The arbitrator is retired senior UK Judge, Lord Leonard Hubert Hoffman.

Latest hearings

During the second round of procedural hearings earlier this month, the tribunal acceded to GMR-MAHB’s request to split the proceedings into firstly determining liability, before quantifying the amount of compensation to be paid separately.

Minivan News understands that the tribunal agreed this would simplify examination and quantification of what was effectively three claims being made in the hearing: GMR-MAHB’s claim for compensation as per the termination clause of its concession agreement, its parallel claim for loss of profits over the lifespan of the agreement due to its termination, and the government’s counter-claim for restitution should the tribunal decide in its favour.

According to a source familiar with the matter, the government’s legal team opposed splitting the proceedings in such a fashion as they had not had access to GMR-MAHB’s documentation, and would therefore be unable to assess the scope of the claim at stake.

Minivan News understands that the tribunal rejected the government’s position on the grounds that it would be quicker, fairer and less costly to resolve the case by first determining liability for each of the claims, and then quantifying these.

Separate development paths

Local media has meanwhile reported that Maldives Airports Company Limited (MACL), which took over management of the airport following the government’s eviction of the foreign investor, has sought a US$150 million loan from Thailand’s Exim Bank for the construction of a new runway.

Sun Online reported MACL Managing Director Bandhu Saleem as stating that MACL’s three-year development project, involving reclamation of land for the runway and development of a new terminal, would cost a total of US$380 million.

“The terminal is being designed. The funding will be available in the next six months or so. We are planning to start the construction of the terminal as soon as the runway is completed,” Saleem reportedly told Sun.

Future development of the airport and fallout from the arbitration proceedings is likely to be affected by the upcoming election.

Of the four presidential candidates contesting the presidential election on September 7, both resort tycoon Gasim Ibrahim and incumbent President Mohamed Waheed have taken strongly nationalistic positions on MACL retaining full control (and responsibility for financing) the airport’s development.

Gasim’s running mate, Dr Hassan Saeed, was an early and emphatic proponent of GMR-MAHB’s eviction, previously issued a pamphlet calling for the cancellation of the agreement and likening it to “taking bitter medicine to cure a disease” or “amputating an organ to stop the spread of cancer.”

The Progressive Party of the Maldives (PPM), a major opponent of the MDP’s government’s signing of the concession agreement, has in recent months appeared to have taken a more conciliatory position, blaming the fallout of the agreement’s sudden cancellation on President Waheed.

“We told the next President Mr Waheed that he should hold discussions with the GMR Group and the Indian government to arrive at an acceptable solution, after which the government was free to act on its own,” PPM head and former Maldivian President Maumoon Abdul Gayoom told Indian media in June. “Unfortunately, this was not done and suddenly there was this unhappy ending.”

The MDP has meanwhile signalled that if elected, it intends to negotiate the return of the developer. Construction of the new terminal was originally pegged for completion by 2014.

“The coup government nullified the agreement, and we will see how best to rectify it,” former Economic Development Minister Mahmoud Razee told Minivan News.

“If need be we will go to the Majlis. Our objective is to get work restarted as quickly as possible,” he said.

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