The Maldives faces a payout of US$170million to a bank in the dispute over the government’s abrupt takeover of the main airport from an Indian developer in 2012, Minivan News can exclusively reveal.
India’s Axis bank, which loaned US$160million for airport development in 2011, is seeking repayment of the loan and an additional US$10million in interest and fees from the Maldives, according to submissions made to a Singaporean arbitration tribunal.
The airport developer, GMR group, is meanwhile claiming US$803million from the Maldives in a separate arbitration after the tribunal ruled the government had “wrongfully” terminated the concession agreement.
President Abdulla Yameen estimates Maldives will be required to pay a much lower figure of US$300million to GMR. If the Axis Bank wins its claim, the payout of US$470million may cripple the domestic economy.
Although total foreign reserves stood at US$614.7million by the end of 2014, usable reserves stood at only US$143.9million, according to the central bank.
Public debt meanwhile stands at 75 percent of GDP and is likely to increase this year with the government seeking additional loans to finance key projects including a US$600million loan for airport development.
The attorney general’s office last year denied receiving notice of the arbitration, but since then has been silent on the proceedings.
The office declined to comment on the arbitration today, and the ministry of finance was not available for comment at the time of going to press.
A verdict is expected in both the GMR and Axis Bank arbitrations by June.
Early termination?
The Axis bank, in a submission in February, said it is entitled to recover the US$170million from the government under an agreement that states the Maldives state is liable for the loan in the event of an early termination or an expropriation of the airport.
But the government in its first statements in 2013 denied having knowledge of the agreement with the Axis Bank.
When the signed agreement was produced, the government said declaring the concession void ab initio or invalid from the outset does not amount to an early termination.
When the separate tribunal in the first phase of the GMR arbitration said the concession agreement was valid and constituted a “wrongful repudiation” (refusal to honor the contract), the government in March this year claimed that “repudiation” alone does not lead to termination.
The government went on to blame the GMR for terminating the concession agreement by “accepting” the government’s repudiation, and said no force was used in the takeover.
Axis Bank is “perfectly entitled to recover the loaned sums from the party to which it loaned them” i.e. GMR, it continued.
However, the Axis Bank contended the Maldives argument to be “highly semantic” and said: “what words were used by the government to characterize its own acts are irrelevant to establishing whether the acts of the government amounted to an expropriation.”
The bank also pointed out the Maldives civil aviation authority had cancelled GMR’s aerodrome certificate from December 7, 2012, making it “legally impossible for GMR to continue to operate the airport.”
The government also accused the Axis Bank and GMR of colluding to extract large sums of money, claiming the infrastructure giant had paid for the bank’s litigation fees for the separate arbitration process.
As an Indian Bank for whom GMR was a major customer, the Axis Bank wanted to cement its relationship with GMR “by assisting it in making a very substantial claim for damages,” the government alleged.
The Axis Bank has dismissed the allegations as baseless.
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@ Ms. Zaheena Rasheed,
If you are so sympathetic towards GMR aspirations beacuse of the kick-back GMR will give you for writng their article verbatim and thinking that the issue will destabilize this government then, you are 100% mistaken. It is people of your like who are SOLD OUT to foreign influences, are the traitors-in-disguise. Leave the country to the people who salvaged the main income earner Male' International Airport. Beacuse, you and the authors of the mischief - ANNI, Zaki and the crowd; will forever be CHAMCHAA to the foreigners trying to grab this country!
thank you Imran
you managed to use islam to mobilize the mob into protesting against the GMR, you spewed so much fear and treated the situation as the end of islam in this country because GMR had the contract.
you Imran had a lot to do with this. you stupid fool! wish all you lot would just go to the middle east!
@habibib
Whatever the faults with Nasheed administration's GMR deal, abruptly throwing out GMR did nothing but potentially bankrupt this country. Is that what you call 'salvaging the main income earner'? Income means money you get, not money you pay out in court mandated compensations.
Maldives currently has bigger concerns of corrupted locals taking over the country. So when 'people of your like' talk about foreigners taking over the country it only shows your own ignorance and disregard for your own people and their future.
Now please proceed to accusing me of being Zaheena Rasheed under a pseudonym, because that's all you can do; make unfounded accusations and conspiracy theories about foreigners.
The silence from the Attorney General's office and Finance Ministry speaks volumes. Clearly something substantial is underway. No matter, neither of those offices have any say or involvement in what happens in this country anymore.
There will be a "committee" taking place in the boys room in the Presidents Office which will decide what propaganda to put out to deflect the bad news!
My son, how many times did I warn you when you went to those protests against GMR? I told you many times that you were being foolish. But you did not listen.
It is because of people like you that are so desperate for your ipads and oranges, that our country is in debt to other countries. You talk about income; this income goes into the pockets of the criminal enterprises who rules this country. You talk about selling out; my son, you are amongst those who have handed Maldives on a platter to foreign banks and companies - all for what? That 100Rf they gave you for attending their protest?.
Your country has already been grabbed by the Maumoon gang; and they are far more crueler than these 'foreigners' you continue to whine about. Yet you are deaf, dumb and blind to this fact. Shame on you, habibib. Stop threatening those who dare to speak the truth that you'd rather hide.
@habibib
When are the likes of you going to realise that a tiny island like yours with no natural resources or any skilled labourers is no interest to any foreign country? In fact the maldives is a liability.
@ Ms. Zaheena Rasheed, +_ Others commenting here.......Hello!
If you are so sympathetic towards GMR's aspirations because of the kick-back the internationally infamously reputed and corrupt GMR will give you for writing their articles and responses to me here verbatim and thinking that the issue will destabilize this government then, you are 100% mistaken. It is people of your like who are SOLD OUT to foreign influences, are the traitors-in-disguise.
Leave the country to the people who salvaged the main income earner Male' International Airport. Hello! Maldives don't beg India any more for another loan to pay civil servants wages, Baba! No more taking over of local businesses by Indians and others after Bribing Zaki, Anni and the gang. We now know that you and the authors of the mischief - ANNI, Zaki and the crowd, will forever be CHAMCHAA to the foreigners trying to grab this country! Give them another chance. Believe me,they are capable of selling their own mothers. AGAIN, BELIEVE ME!
You will never be able to think in a different way. You are still having hangovers of the Dictatorship of 30-years and another a very brief (luckily) but more Totalitarian Dictatorship of a period of all-out-sale-of-nation's sovereign assets by the JUNTA of ANNI and the Gang . The drop-out elements like you, can't think anything Patriotic till you lose your pants to foreigners. It has been a repetition of history of Maldives that after every period of absolute governments there has to be an unpatriotic bunch from among the Maldivians crying for foreigners to invade. Over our dead-bodies friends. No more of this type of THAMAASHAA..
@habibib. I understand that you think everything is about money because for you it might as well be. I'm sure your state of delusion is very lucrative for you in the Maldivian civil service job market, where anybody who doesn't lick Gayoom's feet is fired from their positions. But there are tens of thousands of Maldivians who don't sell their votes and internet comments for cash handouts or free air-conditioners. You might find it hard to imagine that there are people who stand up for their rights and freedoms just because it is the right thing to do. It's hard for you to imagine because doing the right thing is such an alien concept to you.
Do you really think GMR paid 100,000 Maldivians who voted for Nasheed, or the 10,000 people who protested against Yameen in February this year? No. You don't really think that. Those 100,000+ Maldivians didn't vote for Nasheed because he is perfect. They voted for him because he is the only chance we currently have of removing the Gayoom dynasty from power and establishing a truly independent, democratic nation.
You might think independence means 30 years of Gayoom's rule. But in the real world that is not independence, it's autocracy. So before you accuse others of being paid by GMR, why don't you go ask bro for another reload so you can continue posting lies on the internet while deluding yourself into thinking that anybody with a brain listens to your crap? That level of delusion is really quite impressive.
Habibib seems to be paranoid about foreigners 'taking over' the country. Presumably he means India.
Will he please explain why a secular and democratic country like India, with a booming economy, would be remotely interested in a rag tag collection of holiday atolls, with a bankrupt economy, no natural resources and a political system that makes the Democratic Republic of Congo and South Sudan appear stable countries.
Then there's the short, fat, low IQ, drug addicted population of radicalised sunni Muslims who think its perfectly OK to flog women in this day and age. No redeeming features whatsoever.
In other words, there is absolutely NO CHANCE we will EVER be tempted to 'take over' Maldives.
Oh, I almost forgot. All visa applicants at the Indian Embassy will be offered free transport to the Pakistan Embassy. Go there.
Indians talk too much but the 400millions Indian cannot afford one meal a day,and 70% population's doesn't have excess to toilet,thanks to so called developed India
Habibib seems to be paranoid about foreigners 'taking over' the country. Presumably he means India.
Will he please explain why a secular and democratic country like India, with a booming economy, would be remotely interested in a rag tag collection of holiday atolls, with a bankrupt economy, no natural resources and a political system that makes the Democratic Republic of Congo and South Sudan appear stable countries.
Then there's the short, fat, low IQ, drug addicted population of radicalised sunni Muslims who think its perfectly OK to flog women in this day and age. No redeeming features whatsoever.
In other words, there is absolutely NO CHANCE we cow worshipping Indians will EVER be tempted to 'take over' Maldives.
Oh, I almost forgot. All visa applicants at the Indian Embassy will be offered free transport to the Pakistan Embassy. Go there. They even share your dumb belief that they are descendants of arabs!