The Civil Court on Thursday ruled in favour of the State Trading Organisation (STO) in the claim filed by minority opposition Dhivehi Qaumee Party (DQP) MP Riyaz Rasheed contesting changes STO made to its agreement with Riyaz’s company Meridian Services.
Meridian Services argued in court that STO in August 2010 lowered its credit limit from Rf20 million (US$1.5 million) to Rf10 million (US$778,210) and shortened the payment period from 40 to 30 days without consulting the company as stipulated in clause 15.3 of the agreement.
Judge Abdulla Jameel Moosa however ruled that as STO had given a month’s notice of the changes in writing on 29 August, 2010 and clause 15.2 of the agreement authorises the government company to lower credit limits and payment periods, there were no grounds to establish breach of contract.
Local daily Haveeru meanwhile reports that STO has sued Meridian Service to recover over Rf19 million (US$1.4 million) owed for oil released on credit as well as Rf384,198 (US$29,800) as fines for non-payment.
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