Courtesy of Andreas Fuchs of Princeton's Niehaus Center, here's a complicated tale of government breach of contract, foreign aid, and nationality. (Sources for the below can be found here, here, and in GMR's press release).

The government of the Maldives just decided to take over control of its international airport and terminate a US$500 million contract with foreign investors from India. The Indian firm GMR is to hand over the airport within seven days and vacate within 30 days. Maldives officials have declared, "Inshallah next Saturday onwards [a Maldives state-owned firm] will be running the airport."

The High Court of Singapore, acting as arbitrator, stayed the Maldives action. But the Maldives has defied the order, saying the deal had "legal, technical, and economic issues." There is also a press report of a "pro-China clique" that influenced the decision to trash the contract. At least some in India see this as an opportunity for politicians in the Maldives to "whip up anti-India sentiments," saying, "it has become an election issue [in the Maldives]."

For its part, the government of India is fighting back and has suspended a US$25 million commitment in foreign aid to the Maldives - effectively linking the airport's fate to another aspect of bilateral relations. [See Andreas's work for the surprising contours of foreign aid coming from emerging market countries.]

My take: While contract sanctity certainly matters to all investors in the Maldives, the contract sanctity at stake here is not of any foreign investor but of Indian foreign investors in particular. Like the vast majority of investor-state disputes, this dispute has been framed in bilateral terms by the parties involved. Thus, Indian actors will fight what is seen as India's fight. As this saga unfolds, diplomats and firms of other nationalities investing in the Maldives will remain out of sight.