Yacht Tours has filed a lawsuit against Allied Insurance with the Civil Court, asking for over USD 115 million in compensation for losses incurred due to delay in paying an insurance claim taken out for H. A. Alidhoo, a resort island.
Yacht Tours said in the lawsuit that Alidhoo was insured under a USD 50 million insurance policy sold by Allied Insurance, and that decision by the company to reject an insurance claim to cover losses incurred during a natural disaster rendered Alidhoo, a 200-bed resort developed with an USD 64 million investment, inoperational for over five years.
Yacht Tours said it would have earned profits if the resort had been operational during the period, and that the company was therefore suing Allied Insurance because the insurance company had violated the terms of the fire insurance policy taken out for the resort, and continued to stand by the violation.
The company referred to the Contract Act, and stated that Allied Insurance should therefore compensate them for all losses suffered by the company during the period due to the said actions.
Yacht Tours said Alidhoo incurred USD 22.7 million in losses due to rainy weather in 2004, from Augsut 30 to September 15.
The company has asked for USD 115.5 million in compensation.
Yacht Tours has also asked the court for an injunction to freeze the bank account of Allied Insurance and its parent company State Trading Organization (STO) until the compensation is paid.
The lawsuit comes after the Civil Court ordered Allied Insurance to pay USD 22.78 million (MVR 351 million) as compensation for the damages to Alidhoo in 2014 on Sunday.
The Civil Court found that Yacht Tours has the right to make an insurance claim to cover the damages under the fire insurance policy taken for the resort from Allied Insurance, and should be compensated for the damages.
The ruling was issued by Judge Ali Naseer, who ordered that the compensation be settled over the next six months.
A previous lawsuit filed by Yacht Tours over the case was rejected by the Civil Court. However, the company appealed the decision at the High Court, which ordered the Civil Court to accept the lawsuit. The High Court’s decision, in turn, was appealed by Allied Insurance at the Supreme Court, which ruled in support of the High Court decision.
Yacht Tours is owned by Dhivehi Rayyithunge Party (DRP) leader and Kaashidhoo lawmaker Abdulla Jabir.