Hyderabad The continued silence of Andhra Pradesh Industrial Infrastructure Corporation (APIIC) over its next move, more than a month after the Emaar Properties PJSC, Dubai responded to its legal notice for termination of collaboration agreement seem to push the Emaar-APIIC row into a state of flux.

The dispute between the two joint venture partners of 258-acre integrated township project being developed at Gachchibowli in public-private partnership mode arose in June,2010 when the Corporation contended that the Emaar had deviated from the collaboration agreement of 2005-06 by roping in a co-developer Emaar MGF with full development and marketing rights. That move, it alleged, was without the approval of APIIC board and had drastically reduced APIIC's 26 per cent stake and caused loss to the public exchequer.

The Emaar chairman Mohamed Alabbar in his latest response on December 8 reiterated that there was no deviation and every agreement, including the development agreement had the sanction of the APIIC through its top executives and they also represented the APIIC, in the board of Emaar Hills Township Project Ltd (SPV).

The Emaar clarified that the APIIC's share in profit revenue remains unchanged at 26 per cent and it was committed to ensure it.

While the Emaar is keen to resolve differences amicably through good faith negotiations across the table, it is yet to hear from APIIC. Offering an olive branch to resolve the 'misgivings' through the conciliation board, Emaar also said it was open to conciliation process led by a retired Chief Justice of India if APIIC preferred it.

The Joint Venture partner said it had completed three prestigious components under the agreement-HICC, Novotel hotel, golf course in record time and invested so far about Rs.900 crore but the gated community project which could commence only in 2008 due to legal disputes over patta lands, now faced hurdles as APIIC raised objections relating to the collaboration agreement.

Emaar maintained that it should not be penalised if it was not aware of internal processes in APIIC and it should not be held accountable if the then APIIC Chairman did not feel necessary to seek further internal approvals from APIIC, sources said.

Meanwhile the experts including Solicitor General Gopala Subramanyam, when APIIC sought their opinion about the alleged deviation by Emaar, said that they should first adopt dispute resolution mechanism to settle the issue amicably before terminating the agreement.

The Emaar which did not get any response from APIIC, filed a petition in the High Court against the termination notice as it would cause irreparable damage to the company.

The High Court suspending termination notice, directed the Andhra Pradesh Industrial Infrastructure Corporation on Dec.23 to refer the dispute to the Conciliation Board as it had already taken measures like suspending registrations to protect public interest.