Court orders FAM pay MVR 1.5 Mil to STO

The Civil Court on Sunday ordered Football Association of Maldives (FAM) to pay MVR 1.5 million to State Trading Organization (STO).

To launch a part of FAM’s Dhivehi League in the southern parts of the Maldives, both the association and STO entered into an agreement to launch the “STO South League” on October 18, 2022. As the title sponsor of this agreement, STO furnished a sponsorship fee of MVR 1.5 million to FAM for the league.

The league however, was never held which breached the agreement between FAM and STO, following which the latter had sought its sponsorship fee. STO filed its civil lawsuit seeking this amount.

The trial was held in the absence of FAM, since it did not attend to collect the chargesheet and supporting documents. The court deemed that the association’s absence and failure to collect the chargesheet was indication of their denial to the charges placed against it.

The claimant argued that the sponsorship fee was disbursed in three payments, and was credited to the bank account provided in the agreement. As such, STO credited the sponsorship fee in part payments in the following manner:

1. MVR 700,000 credited to FAM’s bank account on October 23, 2022
2. MVR 400,000 credited on November 28, 2022
3. MVR 400,000 credited on December 29, 2022

STO in its lawsuit requested the court look at only the evidences adduced with the chargesheet award the compensation it sought.

FAM informed its sponsor the football league focused on the southern parts of the country will begin on December 4, 2022. While the tournament never commenced on the notified date, FAM had failed to inform STO if there had been reschedules.

STO wrote and sent a letter to FAM, dated October 29, 2023, demanding the football association to provide its response in written, notifying the new date for the tournament. FAM however, never responded according to the claimant.

STO sent a termination letter on December 6 last year, demanding FAM to return the sponsorship fee.

The Civil Court in its judgement ordered FAM to settle the amount before September 15, 2024.