Court overrules government on lagoon development joint venture

The Civil Court has ruled in favour of Prime Capital Maldives Pvt Ltd in a contract dispute with the government over a joint venture agreement to develop a special tourism zone in Kaafu Atoll Fushidhiggaru lagoon.

In September, Prime Capital sued the government after the Ministry of Economic Development refused to register the joint venture company (JVC) citing lack of authorisation from the president as required by law.

In a verdict (Dhivehi) delivered on July 15, Civil Court Judge Ali Naseer ordered the government to register the JVC within a seven-day period, sign a master lease agreement within five days of registration, “and [to] make all arrangements undertaken by the government in accordance with the agreement”.

An agreement was signed between Prime Capital and the Maldivian government on January 18, 2013 – under the administration of former President Dr Mohamed Waheed – to lease the Fushidhiggaru lagoon for a 50-year period to a JVC with a 25 percent stake for the government.

According to local media, the government was to receive 30 percent of the profits from the tourism venture in the lagoon south of the capital Malé.

Prime Capital is reported to be a Singaporean company.


Following media reports last year suggesting that the JVC agreement was signed secretively, both Finance Minister Abdulla Jihad and Tourism Minister Ahmed Adeeb initially denied the existence of an agreement to lease the lagoon.

Less than two weeks before the first round of last year’s presidential election on September 7, Jumhooree Coalition campaigner Umar Naseer – now Home Minister – leaked documents to the media purported to be an agreement to sell the lagoon.

Naseer was campaigning for candidate Gasim Ibrahim, while Adeeb was deputy leader of the Progressive Party of Maldives whose candidate – now President Abdulla Yameen – was facing severe criticism from the Jumhooree campaign.

Yameen eventually won the race with Gasim’s endorsement in a run-off with former President Mohamed Nasheed.

The documents leaked by Naseer showed that Finance Minister Jihad had signed the agreement on behalf of the government while Adeeb – also Tourism Minister under President Waheed – had signed as a witness on behalf of Prime Capital.

Naseer alleged at the time that the economic development ministry stopped the project as the cabinet had not officially approved it.

Moreover, the agreement was signed without seeking legal advice from the attorney general, he claimed.

Adeeb denied the existence of an “official” lease agreement and dismissed the allegations as a “political assassination” attempt in the days preceding the presidential election.

He did say, however, that the Waheed administration was in talks with a foreign company as the previous administration had decided to lease the lagoon.

The Anti-Corruption Commission was meanwhile asked to investigate the deal.

Adeeb also suggested that Naseer was upset after the government refused to lease a lagoon called “Gaafalhu” for his whale submarine business.

In its lawsuit, Prime Capital had reportedly submitted a letter signed by Tourism Ministry Deputy Director Hassan Zameel sent to the economic development ministry requesting approval of the JVC registration.

The Civil Court ruled that registering a joint venture with a government stake was the legal responsibility of the government and ordered the relevant ministries to fulfil all contractual obligations.


Singaporean company sues three government ministries over lagoon lease

A Singaporean company called Prime Capital has sued three government ministries for alleged breach of an agreement signed with the company by Tourism Minister Ahmed Adheeb and Finance Minister Abdulla Jihad to lease the Fushidhiggaru lagoon in Kaafu atoll.

According to newspaper Haveeru, the lawsuit filed at the Civil Court on September 19 states that the ministers signed an agreement to lease the lagoon to be developed as a special tourist zone by a joint venture company (JVC) with a 25 percent stake for the government. The lagoon was to be leased for a 50-year period with the government to receive 30 percent of profits from the venture.

However, the Economic Development Ministry refused to approve registration for the joint venture company citing lack of authorisation from the president as required by law. The company is suing the Tourism Ministry, Finance Ministry and Economic Development Ministry and asking for a court order to compel the latter ministry to register the JVC.

The lawsuit also stated that the company was facing financial losses due to the government’s failure to hand over the lagoon in accordance with the agreement signed in January 18. A hearing of the Civil Court case has not been held yet.

The company also submitted a letter signed by Tourism Ministry Deputy Director Hassan Zameel sent to the Economic Development Ministry asking for approval of the registration.

Both Adheeb and Jihad had previously denied signing an agreement to lease the Fushidhiggaru lagoon.