Tata files for arbitration after Odeon, Naadhee deal dissolved

Indian companies Tata Housing and 18SG Group have filed for arbitration following the termination of the agreement with Maldivian government to build housing units in two plots of land – Odeon and Naadhee - in Male’ City.

Tata was awarded the projects to build housing units in two other plots of land – Gaakoshi and Arabiyya – in 2010 during former President Mohamed Nasheed’s administration. The housing units were built and handed over to the Maldivian government after delays in April, 2016.

The projects to build housing units in Odeon and Naadhee was also plagued with delays. Tata and 18SG started construction work this year after they were given notice and threatened with termination of contract.

The companies laid the foundation for the two projects in February. Ministry of Housing and Infrastructure terminated the contract and re-possessed the land in April.

Owner of 18SG, Sanyogita Atrey said “they gave us the land then, and now the new government has taken it back.”

Hindustan Times reported this Wednesday that Tata Housing has filed for arbitration and has sought to settle the matter with President Abdulla Yameen Abdul Gayoom’s administration.

Minister of Housing and Infrastructure, Dr. Mohamed Muizzu announced in April that the Maldivian government had allowed Tata multiple concessions, but that the company had failed to build the housing units despite that.

He said the government did not want either the Maldivian government or Tata to incur any more losses due to the delay.

“We want to terminate the contract as the work hasn’t been done to date. We have made this decision in reference to the clauses in the contract and informed the parties of this decision,” said Muizzu.

The case bears similarities to the termination of the 25-year contract with Indian company GMR to run Ibrahim Nasir International Airport (now Velana International Airport). The project was awarded to GMR during former President Mohamed Nasheed’s administration, but cancelled in 2012 during his successor – President Dr. Mohamed Waheed Hassan Manik’s administration.

GMR filed for arbitration and Maldivian government was ordered to pay USD 271 million in settlement. The payment was settled by Maldivian government in 2016.