Additional reporting by Mohamed Naahee
The Maldivian government has dismissed an injunction granted to GMR by the High Court of Singapore, and vowed that the airport will be run by the state-owned Maldives Airport Company Limited (MACL) by the coming Saturday (December 7).
The Singaporean High Court on Monday morning issued an injunction against cabinet’s decision the previous Tuesday to void the concession agreement for the US$511 million project, and issue the developer a seven day eviction notice.
Under the injunction, “Both MACL and the Ministry of Finance and Treasury, pursuant to the notice issued on 27th Nov 2012 either directly or indirectly, are not allowed to interfere with the rights of the Investor (GMR-MAHB consortium) under the concession agreement,” GMR said in a statement today.
The injunction prompted President Mohamed Waheed’s Special Advisor Dr Hassan Saeed, Defense and acting Transport Minister Mohamed Nazim and Home Minister Dr Mohamed Jameel to call a press conference on Monday shortly after midday.
“The government believes that the injunction issued by the Singapore court can be legally contested in a higher court. The government has decided to appeal the injunction as we believe the injunction lacks any grounds to stop the takeover,” said Hassan Saeed.
“I believe that the Singapore court interpreted the law wrong. We cannot wait for a hearing of the appeal. What I am saying is there is no damage to GMR but we face damages by not terminating the agreement,” Saeed said.
“The injunction did not overrule the government’s grounds that the contract was void from the beginning. Neither did it rule against the government’s grounds that the contract was frustrated. As you would know the Civil Court ruling over the ADC made the contract impossible to act upon,” said Saeed, referring to the airport development charge which his own Dhivehi Qaumee Party (DQP) successfully disputed in court while in opposition.
“This is a sovereign country. We have given them a sovereign guarantee. That means the government will compensate for their damages. An injunction cannot be issued like this to a sovereign state,” he continued.
Defense Minister Nazim meanwhile pledged the government would “continue the airport takeover and Insha Allah from next Saturday onwards MACL will be running the airport.”
“The government remains firm and committed towards implementing its decision to terminate the agreement. We will not reconsider it,” he said.
Following the government’s decision to declare the contract void last week, the Immigration Department announced it was halting the renewal of work permits for foreign nationals associated with the project, immediately affecting 17 of the airport’s 140 foreign staff.
The Civil Aviation Authority (CAA) meanwhile informed GMR that it would withdraw the operator’s aerodrome certificate at 23:59 on December 7.
GMR’s Head of Corporate Communications Arun Bhaghat reiterated to Minivan News that the company had no intention of leaving.
“It is not our intention to leave. We hope the government will act according to the law and respect the legal formalities,” he said.
Spokesperson for the International Air Transport Authority (IATA), Albert Tjoeng, told Minivan News that it was the organisation’s understanding that the airport owner “remains unchanged – it is still the Maldives government. What is changing is the operator of the airport.”
“The priority is to ensure uninterrupted operations at the airport, with no degradation in safety, efficiency and quality of service,” Tjoeng said.
“It is the responsibility of the civil aviation authority to regulate safety at the airport. While this is a commercial matter between the government and the airport operator, it should not lead to cost increases for airlines operating to the airport.”
Lawyer acting for GMR, Fayyaz Ismail of Aequitas Legal Consultants (ALC), told Minivan News that if the government failed to comply with the injunction, “the Maldives will no longer be respected as upholding its obligations under international law, which will be very detrimental to future foreign investment. Hopefully they will be reasonable.”
Former President Mohamed Nasheed, under whose administration the contract was signed, declared that “President Waheed cannot ignore international law at his whim and fancy. Rules are rules and they must be respected.”
Lenders write to MACL
Axis Bank, one of the main lenders to the airport development project, has meanwhile sent a letter to MACL dated November 28 in which it reminded the government that the Finance Ministry was the guarantor of the direct agreement “in which the guarantor has undertaken and irrevocably guaranteed to pay any sums due… as a separate and independent obligation notwithstanding any termination of the concession agreement by the grantor or the project company for any reason whatsoever.”
“As a sovereign undertaking by the Republic of Maldives, we are sure that the Ministry of Finance and Treasury shall honour the aforesaid guarantee to repay the Finance Parties, notwithstanding the grounds on which the Ministry has declared he Concession Agreement as void, which has the consequences of terminating the Concession Agreement,” the bank wrote.
“We fear that the taking over of the airport without setting the dues of the Finance Parties shall be detrimental to the interests of the Finance Parties and shall go against the spirit of foreign investment in developmental projects of the Republic of Maldives.”
India considers withdrawing aid, withdraws representative
Indian media has meanwhile reported that the Indian government is considering freezing aid to the economically-crippled archipelago, notably a US$25 million loan necessary for the payment of civil servant salaries and the construction of a police academy.
“We are not happy with the way Maldives cancelled the GMR airport deal. This has surely left an impact on our bilateral ties,” a foreign ministry official told AFP. “A decision whether the money should be given or not will be taken soon.”
However the Indian High Commission told newspaper Haveeru that the suggestion was “unofficial” and that such a decision would not be “unilateral”.
Indian media also reported that High Commissioner D M Mulay had been appointed Indian Consul General in New York, and is to be replaced by Rajiv Shahare.
President’s Office Spokesperson Abbas Adil Riza had described Mulay as a “traitor and enemy of the Maldives and the Maldivian people” during a rally on November 9 calling for the government to “reclaim” Ibrahim Nasir International Airport (INIA) from GMR.
The remarks were widely reported by Indian media, sparking a diplomatic row and forcing the President’s Office to issue a statement distancing itself from the comments.
However Riza subsequently stood by his comments spoke at a second rally, characterising the Indian media coverage of his remarks as a “success” and urging participants to persevere “until GMR leaves this country.”