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GMR wins maldives airport case, seeks compensation

The tribunal has directed Maldives and the state-owned Maldives Airports Company (MACL) to pay $4 million legal damages to GMR within 42 days.

, ET Bureau|
Updated: Jun 20, 2014, 04.27 AM IST
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GMR wins arbitration case against Maldives govt
MUMBAI: GMR Infra on Thursday said it has won a more than 18-month long legal battle with the Maldives government which started after the government cancelled the company's contract to develop and operate the country's main airport.

According to GMR's filing on the National Stock Exchange, a Maldives' tribunal has judged the government's rejection of the contract "wrongful".

The tribunal has directed Maldives and the state-owned Maldives Airports Company (MACL) to pay $4 million legal damages to GMR within 42 days.

GMR has in addition, demanded a compensation of $1.4 billion for losses incurred in the last one year on its bid amount and investments in developing the airport.

Hassan Areef, a spokesman for the MACL didn't immediately respond to emailed queries.

The ruling and possible compensation will bring much-needed relief for GMR whose international airport projects have been facing trouble.

After winning its latest project the Phillipines Mactan-Cebu International airport last year, the company had faced trouble when a rival bidder raised issues of conflict of interest. GMR, however, subsequently bagged the project.

Last December, the company sold its 40% stake in its second Turkey's Istanbul Sabiha Gokcen International Airport for ¤220 million. The company had invested ¤90 million (.`737 crore) in the airport but lost.`123 crore on it in 2012-13.

On July 28, 2010, a joint venture between GMR Infra (77%) and Malaysia Airports (Labuan) Private Limited (23%) bagged a development and operations contract for Ibrahim Nasir International Airport a brownfield airport at Male. The venture had bid $511 million.

The new terminal development project was on track for an early 2014 commercial opening date before it had to be halted due to a ‘Stop-Work' order by the Maldives aviation ministry in August, 2012, according to GMR's latest annual report.
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