GMR Infrastructure Limited’s subsidiary GMR Male International Airport Ltd (GMIAL), whose contract for modernisation of Male international airport was unilaterally terminated by the Maldives government in 2012, has got relief as an international tribunal has declared its concession agreement for Maldives airport as valid.
In a filing to the stock exchanges, GMR Infrastructure said that the Singapore-based Rt Hon Hoffman’s Tribunal declared that the concession agreement “was not void for any mistake of law or discharged by frustration”.
“Government of Maldives and Maldives Airport Co. Ltd (MACL) are jointly and severally liable in damages to GMIAL for loss caused by wrongful repudiation of the agreement as per the concession agreement,” GMR Infrastructure said.
After detailed proceedings lasting more than 18 months, the tribunal has said that Maldives government and MACL should pay GMR $4 million of compensation within 42 days.
GMIAL had signed a concession agreement with the government of Maldives and MACL for the $500 million modernisation and operation of Ibrahim Nasir International Airport in 2010.
However, the Maldives government terminated the contract and subsequently started off arbitration proceedings on November 29, 2012, seeking a declaration that the concession agreement was void ab initio. GMIAL had disputed this termination.
Shares of the GMR Infrastructure were trading at Rs 33.15, up 0.91 per cent on the BSE from their previous close, in a flat Mumbai market on Thursday. GMR Infrastructure runs airports in Hyderabad and New Delhi.
(Edited by Joby Puthuparampil Johnson)