The Edition


Allied requests for temporary court order to delay USD 22 million payment

Shahudha Mohamed
12 October 2020, MVT 09:10
Allied Insurance's office location in the capital city of Male'. PHOTO: NISHAN ALI/ MIHAARU
Shahudha Mohamed
12 October 2020, MVT 09:10

Allied Insurance, on Sunday, requested the High Court to issue a temporary postponement on implementing the court's verdict, which stipulated that the company pay USD 22 million (MVR 340 million) to Yacht Tours Maldives Pvt Ltd.

The renowned insurance company cited that having to pay the money at the time may jeopardise Allied's businesses to the point that the company has to halt operations as the reason for making such a request.

Earlier, Yacht Tours Maldives lodged a case against Allied at the Civil Court seeking compensation for the damages to Alidhoo Resort in Haa Alif Atoll. The Civil Court, in July 2020, sentenced Allied to pay off the compensation within a period of six months, meaning the insurance company had to make a payment of USD 3.7 million (MVR 57 million) per month.

However, Allied appealed the Civil Court's order at the High Court, stating that such a measure taken against Allied may have a negative effect across Maldives’ entire insurance industry.

Speaking at Sunday's hearing, the insurance company's lawyer Ahmed Muizzu stated that if authorities moved against Allied by freezing its accounts, as is done in similar cases, "the services provided to customers will come to a halt, and the customers' rights will be violated".

Noting that insurance businesses depend on trust, Muizzu stated that implementing the Civil Court's verdict may result in reinsurance companies blacklisting Allied.

"[Allied] may also lose the opportunity to conduct reinsurance business in the future", he added, listing the drawbacks for the company.

Although Allied Insurance lodged a request at the High Court to delay the implementation of the Civil Court's order, Yacht Tours Maldives' lawyer Mohamed Shifaz stated that no steps have yet been taken to implement the Civil Court's order, since authorities pause on implementations once a case is appealed at a higher court.

Therefore, Shifaz said that there is no reason to specifically issue an order delaying Allied's payment.

Responding to Shifaz, Allied's legal team claimed that a letter addressed to the court by Yacht Tours, requesting the implementation of the verdict, was circulated on social media channels.

The letter in question. submitted to the Civil Court on August 23, stated that Allied Insurance had failed to pay the USD 3.7 million due for the first month, and requested the court to take measures to ensure the implementation of the verdict.

Allied's legal team pressed for a court order, based on the fact that Yacht Tours has publicly sought to freeze the insurance company's accounts.

"That is a very real possibility even now. Due to that fear, [Allied has the agency to request an order]", Allied's legal representative Mohamed Shafeeu asserted.

He further noted that Allied stands to suffer if the High Court does not issue an order, but Yacht Tours will lose nothing even if the implementation of the Civil Court's order was delayed till the end of the appeal process.

After considering the points raised by both companies, the judges' bench concluded that a decision will be made and both parties will be informed.