* GMR Infra shares down 3.5 pct after court decision
* Maldives plans to take over airport at midnight on Friday
* Airport project island nation's largest foreign investment
(Adds comments from president's spokesman, background)
SINGAPORE/COLOMBO, Dec 6 (Reuters) - A Singapore court ruled
in Maldives' favour on Thursday in the South Asian island
nation's move to cancel a $511 million airport development
contract with India's GMR Infrastructure, clearing the
way for it to take over the airport.
The ruling comes after an order won on Monday by GMR that
had suspended the government's decision to cancel the contract,
although the Maldives had still been pressing ahead with plans
to take over the airport.
"The Maldives government has the power to do what it wants,
including expropriating the airport," Sundaresh Menon, the Chief
Justice of Singapore, said in court.
Shares in GMR Infrastructure were down as much as 4.2
percent following the ruling after earlier being in positive
territory on the day. It later pared some of those losses.
A GMR spokesman declined immediate comment.
"We will take over. We will enroll all those people from GMR
who wish to join. Those who don't can go home. By Friday
midnight we will take over," Imad Masood, the Maldives
president's media spokesman, told Reuters, adding that the
Maldives would pay compensation to GMR.
The two sides have not yet agreed on terms of compensation.
The standoff over the project threatens to cloud foreign
investor sentiment towards 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.
The government of the Maldives, a tropical island chain
south-west of India famous for its luxury beach resorts popular
with honeymooners and scuba divers, cancelled the 2010
agreement, the largest foreign investment in the country, saying
that it was not valid.
The cancellation follows a year of political turmoil that
saw the ousting of its former president and months of unrest.
The contract to upgrade and operate the airport and build a
new terminal came after a global tender overseen by the World
Bank and signed under former president Mohamed Nasheed's
administration.
The project was implemented through a joint venture company
comprising GMR Infrastructure Limited and Malaysia Airports
Holding Berhad.
However, Nasheed's rivals filed legal action saying the
contract was invalid as it contained a $25 airport development
charge per outgoing passenger which was not authorised by
parliament.
(Additional reporting by Kaustubh Kulkarni in MUMBAI; Writing
by Tony Munroe; Editing by Muralikumar Anantharaman and Jonathan
Thatcher)
Source: http://news.yahoo.com/1-singapore-court-rules-maldives-airport-dispute-084548351--sector.html
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