Supreme Court overturns High Court ruling to pause Gulhifalhu reclamation

The Supreme Court today has overturned High Court's interim order to suspend the Gulhifalhu reclamation project.

The matter was first bought to High Court's attention by environmental activist Humaida Abdul Ghafoor during former president Ibrahim Mohamed Solih's administration. Humaida argued that without a temporary stay order, the reclamation could result in irreparable damages to the environment, the plaintiff, public and future generations.

At the time High Court an interim order and decided that the damages caused by proceeding with the reclamation would be far greater than the financial loss incurred from stopping the project. However, this ruling was appealed at the Supreme Court by the Attorney General's Office citing significant financial loss for the state.

Reviewing the case today, Supreme Court said that the High Court's ruling was in violation of the policy set forth by the Supreme Court on such matters and as such, the lower court's verdict was quashed.

Supreme Court also said that the state stands to face significant financial loss should the reclamation be stopped, given that the agreement made between the state and the company which has been awarded the project stipulates that a fee of 15,300 Euros per hour must be paid as idle fee if the project is stopped. As such, the government may face irrecoverable damages due to the stay order, said the Supreme Court.

The court also added that Humaida's statements failed to clarify whether the environmental damages caused by the reclamation would be permanent.

Although the High Court's decision was overturned today, the Supreme Court had earlier issued a temporary order allowing the reclamation of Gulhifalhu. Authorized under the order, the reclamation of Gulhifalhu is now complete.

The 65 hectare reclamation project worth USD 2 billion was issued to Royal Boskalis of Netherlands on October 17, 2019 during former President Ibrahim Mohamed Solih's administration. However, President Dr Mohamed Muizzu has since added another 85 hectares to the project as well as another 150 hectares in the second phase of the initiative.