The Maldives on Tuesday became a signatory to the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention.
Attorney General Ibrahim Riffath, who signed the convention during an official visit to the United States, called the accession “a historic milestone” that underscores the government’s “commitment to improve and enhance [alternate dispute resolution] mechanisms in the Maldives and create a more enhanced investment climate for businesses and promote investor confidence.”
As a party to the convention, Maldivian courts will be obliged to recognise and enforce arbitration awards determined in other states. The Maldives became the 161st nation to sign the convention. The decision to accede to the New York Convention was made by the cabinet in March 2010.
In early August, the Maldives also signed the UN Convention on International Settlement Agreements Resulting from Mediation, also known as the Singapore Convention. The convention offers a global framework for businesses to settle disputes out of court and enables the enforcement of settlement agreements in member states. The Maldives was among 46 UN member states who signed the convention in Singapore.
The Maldives will need to ratify the convention after enacting a new law, the Attorney General’s office noted at the time.
In the recent past, the Maldives government has paid large settlements awarded by the International Arbitration Court in Singapore, including US$271 million for the cancellation of an airport development agreement and US$18 million for the cancellation of a border control project.
But American hospitality giant Hilton struggled to enforce a Singaporean arbitration award of US$26 million in damages for local company Sun Travel’s abrupt termination of a management agreement for the Irufushi resort in May 2013.
In February this year, a Singaporean court of appeal upheld the arbitration award as final and binding.
The Maldives International Arbitration Center was established under an arbitration law passed in 2013 but the centre remained inactive and a budget was only allocated by parliament last month. President Ibrahim Mohamed Solih appointed top lawyers to the centre’s three-member board last April.