MTDC agrees to pay Yacht Tours $3.5 million to end court dispute
28 Jan 2010, 1:53 PM
Ahmed Nazeer
The Maldives Tourism Promotion Board (MTDC) has agreed to an out of court settlement with Yacht Tours Maldives (YTM) after a long-running dispute over Herathera Island Resort.
MTDC claimed that YTM had been running Herathera Island Resort without paying rent and took the company to court. In May last year YTM was ordered to pay US$8 million in outstanding rent to MTDC.
Managing Director of MTDC Mohamed Mihad said if necessary, the board would withdraw the funds from the US$10 million bank guarantee YTM had paid to to secure the resort during the bidding process to sublease the island.
YTM stopped paying rent in December 2008, claiming MTDC had failed to fulfil a contractual obligation to build a channel between Herethere Resort and Hulhudhoo, an adjoining inhabited island, by 30 November 2008.
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