GMR: Now Singapore court rules in favour of Maldives

A Singapore court ruled in Maldives' favour on Thursday, overturning an earlier order won by GMR Infrastructure that had suspended the South Asian state government's decision to cancel its $511 million airport development contract with the company.

A judge at the Singapore Supreme Court ruled in Maldives' favour, meaning it can go ahead and cancel the contract, effectively taking control from GMR.

Shares of the company were down 3.74 percent on BSE at 1350 hours.

The standoff over the project threatens to cloud foreign investor sentiment on Maldives, which is seeking overseas cash for many of its tourism projects.

The country terminated an agreement with GMR last week, rattling its relations with India.

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Earlier, GMR had won a stay order from the Singapore court, which the company said has jurisdiction over disputes in the agreement, on cancellation of the airport contract.

The stay order failed to put an end to the dispute as the Maldivian government defied the order saying it would wrest control of its international airport from GMR Infrastructure on Saturday.

The authorities even said that the company is willing to move out and has accepted the offer. The company, however, has denied this. At a press conference yesterday, Sidharath Kapur, CFO of GMR's airport division, hoped that the Maldivian government would honour the Singapore court's stay order.

The stand-off between the company and Maldives started after the government there cancelled the airport contract, saying it was not financially viable for the country.

At the crux of the issue is an airport development charge of $25 and insurance charge of $2 that were being levied on every departing international passenger by GMR. The company had stopped levying this after a local court termed it illegal.

The issue has hence diplomatic proportions with the Indian government even hinting at holding back the assistance to the atoll nation. There were also media reports that said the Indian government may delay the promised $25 million aid for Maldives.

GMR's Kapur, meanwhile, has said he does not rule out foreign hands behind the Maldivian move.

With inputs from Reuters