High Court Rules Laamu Asseyri Project Contract Void

The High Court, on 4 October 2017, struck down the lower court’s decision to enforce a contract between J Hotels and Resorts Private Limited and the State.

In the case decided by the Civil Court in favor of J Resorts, it was held that there was in fact, a contract between the State and J Resorts and as such, the two parties were to create the Joint Venture Company under said contract and, that the Ministry of Finance and Treasury and the Ministry of Tourism and other relevant state institutions were required to sign the contract. This decision, was then appealed to the High Court of the Maldives by the State.

The High Court, in its decision, held that Section 4 of the Maldives Contract Law requires that if a Law requires a contract to conform to certain requirements as prescribed by Law, such contract must be made in accordance with that Law. As such, any lease of a state land or island for tourism purposes must be in accordance with Section 6 of the Maldives Tourism Act. However, the High Court did not find any agreement made in accordance with Section 6 of the Tourism Act.

Furthermore, the appellate court found that J Resorts submitted its “Project Proposal for Development of Hadhunmathi Gamu Asseyri” on 2 October 2011, which was after the expiry of the deadline given by the Ministry of Tourism to the public for the submission of such proposals. Even though the Ministry’s tentative response to the proposal on 3 October 2011 was positive, the Court found that the exchanges between the Ministry and J Resorts were in the nature of negotiations and the letter sent by the Ministry on 3 October 2011 was rendered invalid by another letter sent by the Ministry to J resorts on 19 December 2011.