Maldives Supreme Court has ruled in favor of Dheebaaja Investment for terminating ferry service contract with the company.
In its ruling, the Maldives apex court said the government breached the contract.
The court's ruling on the case has come nearly six years since it entered trials.
In 2011, Maldives government entered an agreement with Dheebaaja Investment to commence ferry services in the Northern Province of the Maldives. The agreement was however, terminated in 2013 for which the complainant had claimed MVR 348 million in damages.
The majority of Supreme Court judges' bench ruled in favor of the company, noting that the agreement was terminated in breach. However, the court found Civil Court's ruling to pay the aforementioned amount in damages to the company, was wrong.
Supreme Court ordered Civil Court to revise the damages to be paid to the company.
According to Justice Ali Rasheed Hussain and Justice Mohamed Ibrahim, though Maldives government claimed the company failed to facilitate ferry services for the majority of the contract area, in its reason to cancel the contract, it was evidenced through the state's letters that the company in fact, upheld the agreement.
State had cancelled the contract without providing notice to the contracted party, which was the main breach.
While the state had issued a letter to the contractor regarding the poor quality of service, this did not constitute for a contract termination without prior notice with regards to the agreement, according to Justice Ali Rasheed Hussain.
Though he opined in favor of the company, Justice Ali Rasheed notes that the damages awarded by the Civil Court were wrong and required revision.
In his opinion, Justice Mohamed Ibrahim said that had the government acted differently; and in accordance to the agreement by taking necessary action to address the quality of the ferry service before it arrived to the decision of terminating the contract, the court might have sought for a different outcome.
He also pointed that the services were interrupted only in Baa atoll Fulhadhoo and Fehendhoo, which did not constitute for a contract termination without notice by the government. He too argued that the damages awarded by the Civil Court should be revised.
The dissenting opinion came from Justice Mahaz Ali Zahir, who claims that the state did not breach the agreement in its decision to terminate the contract. According to him, the communication between the parties to the contract indicate that the government addressed the quality of service, while the statements in the letters indicate that the government provided a week's duration for the company to resolve the issues and failure to this will subject to contract termination - confirming that the government did, in fact provide notice. Moreover, there was insufficient evidence to prove that the company improved the addressed issues.
Furthermore, Justice justice Mahaz said Dheebaaja failed to prove that the High Court's order rejecting damages for the company, was legally wrong.
Dheebaaja argues that state failed to provide a total of 46 plots to the company. It had claimed that the plots were not handed over through a separate agreement.
Justice Ali Rasheed points out that some of these plots have already been handed over, while the remaining plots have not been handed owing to the dispute between the contracted parties, which does not indicate that the state was denying to hand the plots. Moreover, the agreement did not reflect a specific date to hand over the plots.
Justice Mohamed Ibrahim argues that the government handed over the plots, with written letters as proof which does not validate the plots have been legally handed over to the company. However, he notes that there was no grounds for Dheebaaja to refuse facilitating their services.
- In 2016, Civil Court ordered government to pay MVR 348 million in damages to Dheebaaja Investment
- Maldives High Court dismissed Civil Court ruling in 2018
- Maldives Supreme Court dismissed High Court ruling in 2019
- Following a review of the Supreme Court ruling in 2021, the previous ruling was rescinded
- Dheebaaja appealed the case to Maldives Supreme Court once again in 2021
The case was first appealed in 2019. Supreme Court held that the case was registered at High Court after the appeal period was due, and subsequently dismissed High Court's ruling.
Maldives government request to review Supreme Court's decision in 2021, after which the court decided to rescind its previous ruling upholding High Court's ruling on the case. Supreme Court provided opportunity to Dheebaaja to appeal.
It was also confirmed that Dheebaaja had agreed with Maldives government for a settlement of MVR 174 million in 2019, outside of court. However, the company decided to appeal the case with the Maldives Supreme Court.
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