GMR Male International Airport Limited (GMIAL), a subsidiary of GMR Infrastructure Limited, has announced it has been awarded compensation of approximately US$ 270 million by the 3 member international arbitral tribunal.

The compensation covers the debt, equity invested in the project along with a return of 17% and also termination payments and legal costs. The compensation is net of taxes that GMIAL may be required to pay in the Maldives.

As we reported in late February, in 2010, GMR Infrastructure Limited entered into a Concession Agreement with Government of Maldives to upgrade Male international airport in the Maldives.

The bid was organized by World Bank's International Finance Corporation and supported by AusAid (Australia), Ministry of Foreign Affairs of the Netherlands and DevCo.

Under the contract signed in 2010, GMR was to modernise and operate the airport for a period of 25 years. In 2012, the US$500 million airport development project was unilaterally canceled by the then Maldivian government headed by President Mohamed Waheed.

In June 2014 GMR Infrastructure announced that an International Arbitral Tribunal declared its concession agreement to upgrade Male international airport in the Maldives was valid.

The Tribunal said the concession agreement was valid and binding and was not void for any mistake of law or discharged by frustration. The Government of Maldives and Maldives Airport Company Limited was asked to pay GMR US$4 million by way of costs within 42 days. This was far away from the US$1.4 billion that GMR was seeking for compensation over the Maldives Government's decision to terminate the PPP contract to develop Male international airport.

Commenting on the development, a GMR spokesperson said:

“It has always been our firm belief that the cancellation of concession agreement by Government of Maldives was wrongful. We are happy to note that the Tribunal has unequivocally upheld this stand and closed the adjudication with a final award of compensation. This award is a testimony to the high standards of conduct, corporate governance and commitment observed by GMR Group across all its businesses. It further endorses the immaculate track record of the Group in the airport business and its excellent reputation as a leading global airport developer and operator.”