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GMR gets a breather in legal tussle over Male airport

GMR and the Government of Maldives have been at loggerheads over charging increased tariffs for passengers

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, which is engaged in developing the Male International Airport, has won a breather in its ongoing legal tussle with Maldives Airport Company Limited (MACL). According to a statement from GMR, the High Court of Singapore on 19th November 2012 has dismissed the application filed by MACL seeking vacation of the injunctive order granted in favor of GMR Male International Airport Limited (GMIAL) on 23rd July 2012 and made absolute the injunctive relief granted in favor of GMIAL.

GMR Male’ International Airport Pvt. Ltd. (GMIAL) is a joint venture company comprising GMR Infrastructure Limited (77%) and Malaysia Airports Holding Berhad (23%). In 2010, GMIAL won the right to build and operate the (INIA) for 25 years, which is extendable by another 10 years. GMR plans to develop a 0.6 million sq feet  integrated passenger terminal increasing the terminal capacity to handle 5.5 mn passengers pa and a 20,000 sq feet VIP terminal, apart from landside development and improving existing terminal, to enhance passenger comfort and services. Situated on Hulhule Island in the Maldives at the South western tip of India, INIA is one of the fastest growing airports in the region. GMR has outlined plans for a project cost of upto $350 million.

However, during the past few months, GMR and the Government of Maldives have been at loggerheads over charging increased tariffs for passengers and the new government in Maldives has termed the contract as one not in the best interest of Maldives.  GMR has since suspended construction of the new terminal, while it continues to manage the existing one.

It may be recalled that High Court of Singapore on 23rd July 2012 had granted an injunction in favor of GMIAL, restraining MACL from taking any step in the Civil Courts of the Maldives preventing GMIAL from adjustment/set-off of the Airport Development Charge and insurance surcharge, as per MACL’s 5th January 2012 letter, which is now referred to arbitration. MACL approached the High Court of Singapore in October 2012, to get the injunction vacated. 

Now with the latest order in Singapore, the dispute raised by MACL on the validity of the 5th January 2012 letter will be decided in the arbitration proceedings to be held in Singapore.

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