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Malaysian firm files for arbitration against Maldives over contract breach

Shahudha Mohamed
25 September 2019, MVT 12:08
A rendering of the 25-storey office complex under construction at Hulhumale' Phase Two by Malaysian company WZR Property. The company filed for arbitration over a contract breach by the current government. PHOTO: MIHAARU
Shahudha Mohamed
25 September 2019, MVT 12:08

A Malaysian company, on Tuesday, filed for arbitration against the Maldivian state over an alleged breach of contract signed in former President Abdulla Yameen Abdul Gayoom's administration.

According to Malaysian news outlet Malay Mail, WZR Property Sdn Bhd group's Chairman Datuk Sazmi confirmed that the arbitration was filed at the Asian International Arbitration Centre.

Sazmi told Malay Mail that WZR Property won the bidding process conducted by the Maldivian Ministry of Finance and Treasury to develop a 25-storey office complex on Phase Two of reclaimed suburb Hulhumale' and was awarded the contract on February 1, 2016.

According to Housing Development Corporation (HDC), the office complex was set to be developed with state-of-the-art features found similar to those in well-developed nations. The project was to be completed in 2018.

The total cost of the project, which was officially signed on March 1, 2016, amounts to nearly USD 123 million.

However, WZR Property claims that it has not received a single payment despite completing 20 percent of the total work in addition to 60 percent of the pilings for the structure.

Highlighting that the contract was signed during the previous government, the Malaysian company stated that the current administration was reluctant to continue the project.

"... and our outstanding claim of USD 29 million was not being entertained", Sazmi told Malay Mail.

Listing the company's efforts to get a response from the government, Sazmi said, "We have written them letters, went through our diplomatic channels through Wisma Putra to get them to reply to us and so on but there’s no effort from them except for several meetings with them but there was nothing in black and white whether they are continuing or not".

WZR Property's Chairman told the Malaysian news outlet that the only high-profile meeting that was afforded to his team was with deputy finance minister Mohamed Firzul Hussain Firaz and High Commissioner of Maldives to Malaysia Visam Ali.

When contacted by Malay Mail, Visam responded saying that the Maldivian government has been in consultation and negotiation with the company, adding that anything she says will further hinder the process.

If President Ibrahim Mohamed Solih's administration decided to cancel the project, Sazmi claims WZR should be compensated with an additional USD 30 to 40 million, on top of the USD 29 million owed by the state.

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