Freezing Jabir's Yacht Tours accounts unlawful: Supreme Court

The Supreme Court ruled that former Kaashidhoo MP Abdulla Jabir's business Yacht Tours' accounts were frozen unlawfully.

The state tax authority, MIRA, ordered to freeze the company’s accounts claiming non-payment of lease and penalties for Alidhu, Beenaafushi Resort and Kandaali Finolhu islands.

Yacht Tours filed a lawsuit in the Civil Court contesting the decision. However the court ruled that there was no basis to determine that the accounts were frozen illegally. The High court also upheld this verdict.

However, Yacht Tours appealed the case at the Supreme Court, which ruled that the legal arguments for MIRA's authority to freeze Yacht Tours' accounts were weak.

The ruling highlighted that the matter was regarding a business transaction and that the fundamental bases of a business includes mutual agreement clauses and all parties involved in the business being fair in the face of law.

“Although the State is the contracting party, in civil agreements, a particular contracting party has no additional priority or additional benefit by virtue of their status or position outside the contract,” the ruling said.

The Supreme Court said the agreement in the case clearly stated the procedure to be followed in case of non-payment of leases and that the first step would be sharing liquidated damages, after which the agreement could also be voided.

The verdict noted that Yacht Tours' accounts could not be frozen as a measure that were not included in the remedies available to the state via the agreement in the event lease non-payment.

"Other options cannot be chosen under a regulation without using the solutions [offered in the agreement]," the ruling said.

The three-judge bench ruled that the state could opt to freeze company accounts via MIRA only after the agreements between both parties described the solution in the regulations and if both parties agreed to it.

Based on these explanations, the court rules that Yacht Tours' accounts were frozen unjustly.