Attorney General asks for Supreme Court to decide jurisdiction on GMR

The Attorney General Azima Shukoor has said she will ask the Supreme Court to rule on whether the laws of the Maldives can be applied to the government’s agreement with GMR concerning the development of Ibrahim Nasir International Airport (INIA), local media has reported.

Shukoor, who was not responding to calls at the time of press today, said a request was sent following the release of a Supreme Court statement yesterday.

“It is against the International laws and the United Nations Charter that any action that undermines any sovereign right of a sovereign state, it is clear that courts of a sovereign nation has the jurisdiction to look into any matter that takes place within the boundaries of that state as according to the constitution and laws of that state,” read the statement.

“Even though a contract has an arbitration clause giving right to arbitrate in a foreign court does not limit a local courts jurisdiction to look into the formed contract, and it is clear that such limitations are in violation of UN Charters principles of sovereign equality, principle of sovereign non intervention within domestic jurisdiction, principle of self determination rights,” read the statement.

Shukoor told Haveeru that if the case could be dealt with by the Maldivian courts, the process would become much easier.

However, she also expressed her confidence that government would be successful in the arbitration case regarding the Airport Development Charge, which was file by GMR in Singapore.

“We can win the case at the Singapore Arbitration even by biding our time. It is quite certain,” she told Haveeru.

The original agreement, argued Azima, was drafted under UK law although both sides agreed to settle any disputes through third party arbitration.

Arbitration

Third party arbitration is often used in order to gain impartial decisions from international experts whilst avoiding the uncertainties and potential limitations of local courts.

One of the world’s leading arbitration companies, the Singapore International Arbitration Centre (SIAC) gives a number of examples of why Singapore is frequently chosen for international arbitration.

Number one in its list is the country’s strong reputation for neutrality, currently placed fifth in Transparency International’s Corruption Perceptions Index, behind New Zealand, Denmark, Finland and Sweden

The Maldives is currently placed 134th in this list alongside Eritrea, Pakistan, and Sierra Leone.

The Maldives judicial system has also faced issues regarding its political independence since the adoption of the 2008 constitution.

A recent report by the International Federation for Human Rights (FIDH) said that “different sections of the judiciary have failed to become fully independent and still lack adequate expertise.”

“According to testimonies from members of the judiciary met by the FIDH team in Male’, under the successive administrations, no political party has actually ever shown any willingness to establish an independent judiciary since each seems to benefit from the existing system,” said the report.

“Moreover, the judiciary is allegedly under the influence of the business sector. For instance, the member of the JSC appointed by the Majlis is also one of the main business tycoon of the country. His presence in the body overseeing the conduct of judges, as well as the general pressure imposed upon the business sector on the judiciary, has therefore been subjected to controversy,” it concluded.

Both civil society groups as well as the current government have acknowledged the need for stronger independent institutions in the country.

President of the Anti Corruption Commission (ACC) Hassan Luthfee told local media yesterday that one of its three cases regarding the GMR deal was nearing completion.

Luthfee, who has recently questioned the ability of the ACC to fulfil its mandate, told Minivan News last week that a high profile case such as this was not easy for the institution to finish which was likely to result in delays.

“Even an international organization such as the International Finance Corporation (IFC) had provided expertise in this case. So when such an allegation of a major criminal offence has been made we must probe the matter quite extensively. This is by far the most high profile and sensitive case. So we must be certain,” he told Haveeru yesterday.

The IFC was forced to defend itself this week after being described by senior cabinet figures as “irresponsible and negligent” during the INIA bidding process.

Shukoor had said last week that as long as the agreement between GMR and the government is not invalidated, the agreement would be “legally binding” despite a “majority of the people” who wish to “terminate the agreement immediately”.

She also expressed the government’s concern about the effect on investor confidence that may result if the agreement was terminated.

Independent MP Mohamed Nasheed today told local media that, despite indicating its willingness to do so, the Majlis had not at present become a party to the 1958 New York Arbitration Convention which deals with the recognition and enforcement of arbitration awards.

Nasheed argued that the Maldivian constitution requires citizens to act in accordance with international conventions which have been backed by domestic legislation.

He added, however, that the Maldives’ Arbitration Act was still in the committee stage.

Nasheed was not responding to calls at the time of press.

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16 thoughts on “Attorney General asks for Supreme Court to decide jurisdiction on GMR”

  1. Dear Foreign Investor Friends who has invested in Maldives. Lets say goodbye to your investments in Maldives. if a country cannot respect arbitration rules, what else can you expect? . my dear Azima please pass a local arbitration law first, then try to stop the previous agreements based on rules of arbitration.

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  2. Gayooms daughter Golhaa Dhunya told on TV interview that the people of Maldives should make sacrifices, be ready for economic sanctions and face harder times.

    This self centered bit**h thinks she own us Maldivians. Just so her daddy Golhaabo could be the dictator and plunder the nation again and get away with bring a coup.

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  3. This is not about investor or investor confidence. This is about a few corrupt individuals in Nasheed's administration who was bribed and collaborated into leasing one of the most expensive assets to GMR under an unfair deal. Ibrahim Hussain Zaki is now out of the political arena living his dream life with the millions that he made. IFC was just a proxy officials of which were paid to make the deal look clean.

    GMR is making more profit from INIA than Delhi and Turkey airports which are much bigger. This is proof of the unfairness of the deal. They did not build an airport from scratch. They got an on-going highly profitable business. All they have done so far is increasing the prices 3 or 4 folds and making some renovations. This is unacceptable. Without the political pressure they would have taken over all the businesses in Hulhule'.

    They don't pay their taxes according to the law and have to be forced into paying each and every time! Cunning idiots. This is a corruption scandal. The fact that it involves a company from India (which is a strategic partner for Maldives) does not mean that we should just let it go. We need to make the deal fair and should continue to work until it is settled fairly!

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  4. The judges in the Maldives are very open to political interference. Therefore no foreign country should consider them just and fair. No Maldivians should either.

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  5. Agree! this airport deal and the immigration database deal doesn't look clean. Anni is basically a good man ruined by cunning corrupt activists. Maybe he was too kind to be stern to them. but that was his undoing.

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  6. Can somebody please explain to me what the problem with GMR is. For those of you who are willing to politicize this issue - is it

    a) they have increased prices at the airport? if so, what is the problem with this. Has tourist numbers fallen because of this? No. The airlines continue to make a lot of money from the Maldives - and this just allows some of this money to come to the Maldives. It is ultimately passed onto tourists - who do not mind paying this (or else the airport itself will lower it - it's called supply and demand).

    b) Yes - GMR are repatriating profits. But the agreement is that the Govt gets a share of the revenue. So we win on that front. Note also that it is a share of revenue - not profit. So irrespective of what their costs are, the govt wins.

    c) The airport is getting a $300 million investment. The government of Maldives is broke and cannot raise investment in the foreign debt markets - and using a PPP is something every single country in the world has done.

    Apart from pure nationalist xenophobic sentiment - i.e. this mistaken belief that all investment in this country should come from locals and not foreigners - I really don't see the problem.

    As for the government winning this in arbitration court - good luck with that. This was a deal done under the auspices of the IFC - all due process was followed and therefore even if you found a law firm - you simply will not win. Not to mention, having any clout with the government of india.

    Unless of course, this is just posturing by this government to pretend that they are doing something for the sake of show.

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  7. The bottom line with the GMR project is that the the Maldives get an airport to match her Tourism Business and in record time. This country have grown tired of white elephants. The exponential growth thus created far outweigh the petty complaints of a couple of right wing businessmen who missed out on their petty commissions. Go fly a kite with Baaghees and stop bugging the public with your sob stories.

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  8. The foreign investors do not need to worry in the Maldives if they have their agreements for their investment written in accordance to the laws and regulations of the Nation. All foreign investors in the country is quite happy of their investment and with the system they have in the country and they all are very safe. I reject any one saying Maldives is not safe for investments. There are many Singaporean investment too. Can any one have any agreement in any where in the world written and signed against the constitution of any country ? the answer is no. so why people are trying to hurt Maldives and its economy.

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  9. Both this airport deal and the immigration database deal should be scrapped and we have to go on with the normal life of Maldives and let the nature take its place

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  10. The effect of an Arbitration Clause is that the decision of the arbitrator in a dispute will be binding on the parties to the agreement or contract. It must be noted that the jurisdiction of arbitration is limited to resolution of disputes only arising from the contract in its performance. Legal problems or issues of the contract will still be subject to the laws of the country where the business is operated under the contract.

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  11. This whole thing was a mess from the start. But to be fair Gayoom has to take a lot of the blame.
    He appointed incompetent people to run the airport and made a mess of it. People say it was profitable. Of course it was as it was a monopoly but if any of you had travelled through the airport you would have noticed how terrible it was. It leaked from the air conditioning. It leaked when it rained. The air conditioning never worked when it is hot.The space was not enough and all they did was build corridors.
    MACL has been asked many times to improve the place, to put in new baggage screening after check-in, to put customs x ray screening before the passenger collects their bags and all sort.Yet, they could not do.
    So when Nasheed came they decided to get a foreign party to run a JV. This was a good idea but then IFC got involved.
    Now this is where the problems started. This is where IFC office in India got involved and the rest is history.

    The Government is correct in that IFC was negligent and shoddy in their work. IFC along with the technical experts did not do a proper job.
    Noordeen the then Chairman was right that he did not know how the evaluation went. But he should have got his MD, Mohamed Ibrahim, to tell him how the evaluation went as he was there.

    The agreement was written by IFC and it was so biased in favour of GMR, it is unbelievable. But this is not the fault of GMR. This is the fault of Maldivians who were supposed to look after the interests of Maldives instead of their own self interest. The Government by this time, has decided that they would award this to GMR and that unfortunately is what we know today.
    Why blame GMR? They are a business and it is their mandate to make maximum profit for their shareholders.

    As AG says, it is time that politicians let the government handle this instead of making this whole thing a political football. Politicians have no right to decide on what the people want. Most of the people on that Press Conference were not elected members of the Majlis either.
    As for Mr. Gasim, this is a personal thing with him. Just because he has a small private airfield, he thinks he knows everything that is there to know about aviation and airports. That man is an imbecile and to me the biggest threat to the Maldives, if he ever gets elected to the President. He will destroy us.
    If Maldives tries to get out then they would have to pay close to a billion dollars to GMR.
    Now is this the best solution or is it better to renegotiate the deal with them so it is better for Maldives and get a Joint Venture as it was first perceived and we have control of the airport?

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  12. @ mohamed manik on Tue, 18th Sep 2012 1:34 AM

    The issue is neither increasing the prices nor that they are making profits. The issue is that they are making a disproportionately high profit and the share of profit for the Maldivian people is much lower than it could have been. The issue is that there were obviously much better offers. The issue that IFC (the proxy used to look it look good) did not properly inform the maldivian government about the issues surrounding the project. The issue is that it was done in a haste fashion with no regards to transparency. The government did not reveal the terms of the agreement to the people or the media. The terms are too one-sided.

    The most profitable departments of Island Aviation and a number of other supporting businesses such as Maldives Inflight Catering Services were handed over to GMR.

    The agreed share of revenue from airport is much lower given that it was an already profitable venture. GMR has recovered their investment in their first year itself and they are allowed to take development charges to cover their "investment". Any local ordinary business could have done that.

    They have also been really aggressive towards the local businesses in the island.

    Where there is no transparent process for evaluating bids there would b no confidence in future Maldivian government's efforts to attract investors. So we need to investigate this.

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  13. Uz. Azima's wrong again. We do not need the courts and judges. All we need is Umar Naser to ready 70 Bokkura's to invade Hulhule from different directions. We also need a retired Army person like Bilaley to come with a megaphone. A dozen policeman with 39" bellies belted in uniform and a few in plains cloths to surround Bilaley. From the megaphone Bilaley shall announce "Assalaam Alaikum. Evves saruthakaa nulaa GMR Hulhuleyn feybumah husha alhan". DONE - that simple. heh

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  14. @ Fact

    Everyone seems to be talking nonsense. The bid evaluation is on public record and recorded on TV. If you go look at the tapes - you will find that it was a two stage process. First, the bidders had to pass a technical threshold. All three of the bids submitted was regarded to have passed it. The rest was then down to whoever provided the biggest share of their revenue to the government. How can there be a corruption on this because that implies the government knew the price that was going to be offered by all parties APART from GMR. Why would another party let the government know how much they were willing to put - because they too would be scared the government would tip off their 'preferred party'. Think about it - how can there be corruption when it was one qualified party over another qualified party and it just boiled down to who was willing to pay the higher price. If one party was disqualified by a Nasheed crony - then there is foul play. But all parties went through - it then boiled down to who would pay more for the airport. GMR came up trumps on that.

    I wish people would understand that without jumping to conclusions and soundbites thrown about by the different sides of the debate. I am not saying there is no corruption in this or any government - all I'm saying is that I fail to see how in the world there COULD have been a corruption in this scenario. Whether GMR cut deals AFTER they won the airport - we will never know. But they COULD NOT have WON the airport in a corrupt way.

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