High Court rules no compensation for Global Wings

Maldives High Court has upheld the Civil Court’s decision on the Global Wings Private Limited's case against the state. The upper court ruled in favour of the state, claiming it was not liable to pay damages of MVR 205 million.

Maldives government contracted Global Wings under a Corporate Social Responsibility (CSR) agreement on December 15, 2011 for the installation of water and sewerage networks in Haa Dhaalu atoll Nolhivaram and Neykurendhoo. They were also contracted to develop a tourist resort on Noonu atoll Oivaru.

The CSR agreement was signed during former President Mohamed Nasheed’s administration, aligning the contract with his policies of empowering state-affiliated companies through social and community-based initiatives.

Global Wings sought a total of USD 13,296,487 (MVR 205 million) in damages. It filed a civil lawsuit against the Ministry of Finance after the agreement fell through.

The company claimed that it continued to carry out the projects agreed to in the contract, but that the Maldivian government stopped cooperating after April 2012.

They demanded compensation based on the estimated 10-year profit they would have generated from the resort they were contracted to build. Global Wings forecasted a profit of USD 11,150,530 from the resort.

Civil Court on its June 30, 2019 verdict declared that the state was not liable to pay damages claimed by Global Wings. They then appealed the case at the High Court.

Global Wings claimed inconsistencies in the manner in which the state terminated their contract; however, the state countered that it had formally announced a cessation of its CSR project policies and a complete halt on all CSR-based projects contracted to private companies.

The state also claimed that, in response to Global Wings' request, it had provided a new preposition to explain the changes in CSR policies. The new preposition came with five major changes, and was accepted by the company via a letter dated April 15, 2013. The previous agreement between the parties became void after Global Wings accepted the government's newly proposed terms. The High Court's bench unanimously agreed with the state.