Proceedings in the US$1.4 billion GMR arbitration case will begin this Thursday, local media has reported today.
Officials at the Attorney General’s Office told Minivan News that, while they could not confirm the precise dates, representatives of the office working on the case are currently in Singapore.
Citing sources within the government, media has reported that both the government of Maldives and the state-owned Maldives Airports Company Limited (MACL) will be represented at the hearings which they have said will begin on Thursday (April 10) for six days.
The case was filed following the premature termination of the a 25-year concession agreement to develop Malé’s Ibrahim Nasir International Airport (INIA) by the government of President Dr Mohamed Waheed in December 2012.
The Attorney General’s office has earlier stated that the Maldives will be represented by Singapore National University Professor M. Sonaraja, while former Chief Justice of the UK Lord Nicholas Addison Phillips will represent GMR.
The arbitrator – mutually agreed upon by both GMR and the Government of Maldives – is retired senior UK Judge Lord Leonard Hubert Hoffman. Both GMR and the government have earlier stated that arbitration proceedings will be concluded around May this year.
In 2010, GMR Male International Airport Pvt Ltd, owned by GMR-MAHB consortium, was awarded a concession contract to manage INIA in an investment worth US$511 million – the largest in the Maldives history.
In December 2013 President Waheed’s government prematurely terminated the concession agreement claiming that it was ‘void ab initio’, or invalid from the outset.
The management of INIA was returned to the state-owned MACL which at the time was still responsible for some aspects of airport operations.
After an injunction blocking the Maldivian government from voiding the agreement was overturned by the Supreme Court in Singapore in June 2013, GMR initiated the arbitration process claiming US$1.4 billion in compensation for “wrongful termination”.
During the second round of procedural hearings in August 2013, the tribunal acceded to GMR-MAHB’s request to split the proceedings in two – firstly determining liability, before quantifying the amount of compensation to be paid separately.
The proceedings will consider GMR’s claim is for compensation as per the termination clause of its concession agreement, a parallel claim for loss of profits over the lifespan of the agreement due to its termination, and the Maldives government’s counter-claim for restitution should the tribunal decide in its favour.
Indo-Maldivian relations appeared to have be strained following the termination of GMR contract, although bilateral relations have improved with the election of President Abdulla Yameen.
Indian Prime Minister Dr Manmohan Singh has since requested President Yameen to “amicably” settle the GMR airport issue.
Speaking to local media, Attorney General Mohamed Anil has earlier suggested the government had a strong case in the arbitration proceedings.
In separate Singapore-based arbitration proceedings, one of the project’s lenders, Axis Bank, was said to have sought payment of US$160 million for a loan guaranteed by the Maldivian Finance Ministry. These reports were subsequently denied by the government.