The Edition


State pays off USD 55 million to Noomadi

Shahudha Mohamed
12 February 2020, MVT 19:36
Flats under construction by Noomadi Resorts and Residences. PHOTO: NOOMADI
Shahudha Mohamed
12 February 2020, MVT 19:36

Minister of Finance Ibrahim Ameer confirmed on Wednesday that the state has completed the full payment of USD 55 million (approximately MVR 849,750,000) owed to Noomadi Resorts and Residences Maldives, in compensation for the former government unlawfully terminating contracts with the company.

Answering a question posed by Kaashidhoo MP Abdulla Jabir during Wednesday's Parliament session, Minister Ameer stated that the first payment of USD 27.5 million was deposited in September 2019.

"The deadline for the remaining USD 27.5 million was February 29. We have already paid this amount on behalf of the state", he said.

Noomadi filed cases against the state at the Permanent Court of Arbitration (PCA) located in The Hague, Netherlands, seeking USD 155 million (MVR 2.3 billion) and additional costs related to the arbitration process.

The ministry formerly revealed that Noomadi submitted two cases to the firm. One of the agreements were signed on January 20, 2011, to build 600 housing units, while the second agreement, signed on May 30, 2013, was for the construction of 500 housing units, development of the Maldives Police Service's Police Academy Phase One, and the establishment of sewerage systems on three islands.

However, the agreements were later nullified by then-Minister of Housing Dr Mohamed Muizzu, resulting in Noomadi seeking compensation for their losses through arbitration.

"The Maldivian government decided on solving the case submitted for arbitration by Noomadi outside of court, following the advice of the Settlement Committee, established to advise the President on settling such matters out of court, after various discussions", Housing Ministry's former statement read.

According to the statement, an agreement to settle the issue out of court with a payment of USD 55 million was signed with Noomadi on August 25.

As per the ministry, the committee gave counsel on settling the cases out of court, and the state reached an agreement with Noomadi after discussions, with President Ibrahim Mohamed Solih's input.

Minister Ameer also previously noted that the state would have to compensate Noomadi with over USD 200 million if a settlement was not reached out of court.

Further, MP Jabir questioned how Minister Ameer knew that Noomadi would have won the arbitration deal at court.

Admitting that the state's defence was weak and there were many negligences on the former administration's part, Minister Ameen stated that the decision to settle out of court was made after conducting assessments on the compensation, with counsel from a Singaporean law firm.

Some top officials of the current administration previously claimed that former minister Muizzu admitted that the state pulled the plug on Noomadi's projects in violation of the agreement. They also allege that Muizzu addressed a document to the arbitration firm stating that the agreements were annulled on Yameen's orders.