The High Court, on Thursday, issued a stay order on the Civil Court's verdict, which ordered Allied Insurance to pay USD 22.7 million (MVR 339 million) to Yacht Tours, a company owned by Abdulla Jabir, parliamentary representative for Kaafu Atoll's Kaashidhoo constituency.
According to the High Court, there would be no guarantee that Yacht Tours would return the USD 22.7 million if Allied's ongoing appeal case concludes in the latter's favour. Therefore, the compensatory payout was postponed until the end of the appeal process.
Yacht Tours Maldives lodged a case against Allied at the Civil Court in 2014, seeking compensation for storm damages incurred to a resort property previously managed by the company, that was located on Haa Alif Atoll's Alidhoo island.
Then, in July 2020, the Civil Court 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 the type of damages which occurred at Alidhoo resulted from low construction standards as well as poor maintenance and are not covered under the insurance policy chosen by Yacht Tours.
In filing the appeal, the company noted that such a measure taken against Allied may have a negative effect across Maldives’ entire insurance industry.