The lawsuit filed against Fenaka by the Kulhudhuffushi City Council, after the company refused to enter into an agreement with the council regarding the provision of electricity services in HDh. Kulhudhuffushi as stipulated in the Decentralization Act, has been ruled as unproven.

According to the Decentralization Act of the Maldives, it is stated that the council must provide electricity services to the citizens of the city, and if the service is being provided by a third party, an agreement must exist between that third party and the council.

However, the Kulhudhuffushi City Council stated that despite written requests made on multiple occasions to come to an agreement with Fenaka, which provides electricity services in Kulhudhuffushi, no cooperation was received from the company. It also stated that Fenaka had refused in writing to enter into such an agreement.

Therefore, the council requested the Civil Court to order Fenaka to formulate the agreement.

The Civil Court's judgment issued on the matter stated that Fenaka does not provide electricity services in Kulhudhuffushi to render an independent service of its own, but rather provides the service as a government agent under a presidential decree.

Consequently, the judgment noted that the Kulhudhuffushi Council cannot seek a remedy by suing Fenaka for the purposes of the Decentralization Act.

"...The reason being, since the service provided by Fenaka is a service provided by the Maldivian Government through that party," the judgment reads.

This is the first time a council has brought forward such a lawsuit under the Decentralization Act.