The Government of Maldives has today decided to terminate the Concession Agreement, signed on 28th June 2010 between GMR-MAHB Consortium, Maldives Airports Company Ltd, and the Government of Maldives, to lease Male’ International Airport to GMR. Government has also decided to advise the Maldives Airports Company Ltd, a 100% state-owned company, of the Government decision to terminate the agreement.
The government’s decision was based on a paper presented by the Attorney General’s Office at today’s cabinet meeting. The paper was based on findings of a thorough research done for the past 9 months by a cabinet committee.
This paper is based on the technical, fiscal and economic issues, noted by the Ministry of Economic Development, Ministry of Tourism, Ministry of Transport, Civil Aviation Authority, and Maldives Airports Company Ltd. The paper also includes legal advice of lawyers from the United Kingdom and Singapore, apart from that of the Attorney General’s Office.
The technical, economic and fiscal reports on this agreement were done by committees consisting of both government staff and independent technical experts in the country. The legal reports were done by legal teams from the United Kingdom, Singapore, and the Attorney General’s Office. Furthermore, legal advice from MACL’s lawyers from the Maldives and abroad has also been sought.
Following exhaustive discussions at today’s cabinet meeting regarding the above mentioned reports, the cabinet decided to terminate this agreement on grounds that there were many legal, technical and economic issues regarding the agreement, and that it was legally invalid, and impossible to further continue.
Based on all the legal advice regarding the conditions under which the agreement was signed; the events that followed the signing of the agreement; the Civil Court’s ruling on the collection of an Airport Development Charge; the consent letters sent from the Government of Maldives (Ministry of Finance and Treasury) and MACL, on 5 January 2012, the legal teams (both Maldivian and Foreign) agree and advise that this agreement, which was governed under the laws of the United Kingdom, was void ab initio (to be treated as invalid from the outset), and/or that it was an agreement that could not be implemented further, due to frustration. Hence, the cabinet has today decided to terminate the agreement on these grounds.
The decision has now been informed by the Ministry of Finance and Treasury, to GMR Male’ International Airport Limited (a partner of the agreement), and to Maldives Airports Company Ltd (a 100% state owned company).
Moreover, the Attorney General’s Office has now decided to initiate arbitration proceedings against GMIAL, as decided by the cabinet in today’s meeting.