http://www.chess.com/news/norway-urge-bids-for-anand-v-carlsen-match-1403
Match Carlsen-Anand in trouble?

If allowed, this would actually put Chennai at a distinct disadvantage compared to other cities.
Chennai, based on promises already made, submitted an open bid to FIDE. Any city can now top that bid. If Chennai wishes to hold the World Championship, they will have to increase their bid, which is unfair. They followed the rules.

Buried. Up to the knees.
If allowed, this would actually put Chennai at a distinct disadvantage compared to other cities. Chennai, based on promises already made, submitted an open bid to FIDE. Any city can now top that bid. If Chennai wishes to hold the World Championship, they will have to increase their bid, which is unfair. They followed the rules.
To begin with, as was stated in FIDE's own press release
"AICF would be given a first option of three months following the match in Moscow"
Ten months after the Moscow match (seven months too late) came the bid. Nothing in the "rules" say the bid had to be open. FIDE's bidding rules rather say the opposite. So no, Chennai didn't follow any special "rules", they were just given the match the same week Carlsen won the Candidates, when people had started wondering when FIDE would start the bidding process. Paris said they offer more money, and they also have a long history of organizing top events (since before they held Morphy-Anderssen). FIDE might still stick to Chennai and refuse Paris the possibility of having their bid evaluated, but they won't find it easy to get out of this mess without problems.
Here's a link to the original story that Wikipedia mentions:
http://www.chessbase.com/Home/TabId/211/PostId/4009535/mou-signed-for-world-championship-in-chennai-200413.aspx
And here's a copy of the FIDE memorandum that is mentioned: