The high court has ruled the government’s seizure of two lagoons leased to Gasim Ibrahim’s Villa Group lawful in a verdict that critics claim was politically motivated and would affect investor confidence in the Maldives.
The ruling on Tuesday overturned an earlier civil court decision and comes after Gasim, the leader of the Jumhooree Party, threw his support behind former President Maumoon Abdul Gayoom.
Gayoom had withdrawn support from his half-brother, President Abdulla Yameen, accusing him of authoritarianism.
The difference in rulings issued by the civil and high court over the seizure of Villa’s properties have mirrored changes in Gasim’s support for Yameen.
Abdulla Riyaz, the deputy leader of the JP, in a Twitter post, said: “The quality of the judicial system will affect decisions on whether to invest!”
The quality of the judicial system will affect decisions on whether to invest! Maldives need a strong legal framework to protect investors! https://t.co/OFPU5NXynh
— Abdulla Riyaz MP (@riyazabdulla) November 29, 2016
“Investor confidence? Look at this cheap judgement,” tweeted Fayyaz Ismail, an MP with the main opposition Maldivian Democratic Party.
— Fayyaz Ismail (@faya_i) November 29, 2016
Eva Abdulla, also an MDP MP, said: “Nothing says “Investor Confidentiality” quite like a court-system reversing its own verdicts with every political change.”
Nothing says "Investor Confidentiality" quite like a Court-system reversing own verdicts with every political change. https://t.co/ou6wjnXqJB
— Eva Abdulla (@evattey) November 30, 2016
The tourism ministry seized the two lagoons, and three other islands leased to the Villa Group, in February 2015, when Gasim formed an alliance with the MDP.
Villa was also slapped with an exorbitant fine of US$90.4million.
When the company challenged the seizure and the fine, it failed to win stay orders from both the civil and high courts, paving the way for the central bank to freeze Villa’s accounts.
Shortly afterwards, Gasim abandoned the opposition coalition and his party backed several government-sponsored constitutional amendments, including one that barred Gasim from the presidency.
Subsequently, the freeze on Villa’s accounts were removed and the government announced that a plan to pay the controversial fine had been reached.
Later in the year, the tourism tycoon stood by Yameen in the political turmoil that followed an explosion on the presidential speedboat.
In January, the civil court ruled against the tourism ministry, returning all five properties to the Villa Group.
However, the high court, in a ruling on November 27, found that the ministry was right to seize the two lagoons, claiming that the Villa Group had breached the agreement it made with the state for the two lagoons,.
The Bolidhufaru and Vaavehdhifalhu lagoons in Kaafu Atoll were first leased to a man named Ali Ibrahim in 2013 as compensation for the government taking back a plot of land on the airport island of Kahdhoo in Laamu Atoll.
Ibrahim was also owned US$9.8million in damages; an amount the government said it could not pay.
Villa Shipping and Trading intervened in the negotiations, saying that the government could deduct the US$9.8million from taxes and fees it owed to the state, and said that it would acquire the two lagoons from Ibrahim.
According to the high court ruling, the settlement agreement between the government and Ibrahim prevented him and affiliated parties from pursuing further lawsuits against the government.
The court found that the Villa Group had breached the settlement agreement when its subsidiary, World Link Travel Pvt Ltd, filed a lawsuit against the tourism ministry in 2014 seeking US$127million.
The verdict did not state why WLT had sued the government.
Judge Abdulla Didi, the chief judge of the high court, led the three-judge panel that reviewed the case.
Appeals lodged against the civil court ruling on the island of Elaa in Thaa Atoll, Gazeera in Gaaf Dhaalu Atoll and Maanehfushi in Raa Atoll are pending.