Ventilator case: Company instructed to pay MVR 34 million to Maldivian govt.

Maldives International Arbitration Centre (MIAC) has instructed Dubai-based Executors General Trading to pay MVR 34.5 million to the Maldivian government over failure to deliver ventilators – the company contracted by the government to procure ventilators to treat COVID-19 patients in critical condition.

Attorney General’s Office (AG Office), in a statement on Monday, said MIAC ruled on the case submitted for arbitration by the Maldivian government regarding the company’s violation of the agreement executed between Maldives’ Health Ministry and Executors General Trading on April 2, 2020, for the procurement of 75 ventilators during the COVID-19 pandemic.

In the case submitted for arbitration by AG Office in February 2023 – the Maldivian government sought reimbursement for the ventilators that were not delivered and USD 2.1 million amounting to MVR 32.5 million in damages incurred over the non-delivery in addition to interest and arbitration costs.

MIAC concluded that Executors should pay USD 1.8 million for the ventilators that were not delivered – subject to two percent interest per year till the payment is settled. The said interest will be counted from May 2, 2021, onwards as per the ruling.

Additionally, the company has also been instructed to pay USD 223,750 in liquidated damages. The amount is also subject to a two percent interest per year till the payment is settled – from the date the liquidated damages was awarded.

As per AG Office, Executors did not attend any of the hearings over the course of the arbitration. It was also noted that the government incurred USD 132,865 to ensure the arbitration proceeds as the company had not paid the arbitration fee.

MIAC concluded Executors must reimburse the fee to the government; is also subject to a two percent interest per year till the payment is settled.

Therefore, the total amount of money owed to the government by the company totals at MVR 34.5 million.

AG Office, underscoring the award needs to be legally enforced, said the government was undertaking efforts in this trajectory.

Emphasizing that the Maldivian government incurred huge losses over the case – AG Office said the office, in collaboration with other relevant government authorities, is conducting further investigations.

The case involves an MVR 34.50 million contract awarded by the Health Ministry to Executors General Trading to procure 75 ventilators in 2020.

Executors General Trading only delivered 15 ventilators, and while Health Ministry paid MVR 30.91 million, which made for 90 percent of the total payment, to the company as an advance, without obtaining an advance guarantee or a performance guarantee.