Indian company lodges arbitration case against Maldivian government

India-based Luck Exports has lodged an arbitration case against the Maldivian government over the termination of a contract to establish water and sanitation systems in two Maldivian islands.

The MVR 148.9 million contract to establish a water and sanitation system in Lh. Naifaru and a sanitation system in Th. Veymandhoo was signed between the Maldivian government and Indian joint venture Lucky Exports -Triveni on June 18, 2017 – during former President Abdulla Yameen Abdul Gayoom’s presidency.

The contact was terminated citing failure to complete the project within the contracted period by the current administration.

The Attorney General’s Office, in a statement on Monday, said that Lucky Exports lodged an arbitration case against the Maldivian government citing unlawful termination of contract on March 13.

According to the Attorney General’s Office, the Maldivian government requested India’s Syndicate Bank, which issued the bank guarantee for the contract, for the USD 483,451 deposited as performance security by Lucky Exports.

However, Lucky Exports lodged a case with the Delhi High Court seeking an injunction to prevent the transaction, which was issued by the court on January 29, halting the process.

The Attorney General’s Office said the court provided the opportunity for the Maldivian government to respond to the injunction, and that the government presented its response on August 14.

The AG’s Office said it its statement that the Maldivian government is legally obligated to keep information regarding arbitration cases confidential, as disclosure of such information opens room for action against the government by arbitration tribunals.