Asian International Arbitration Centre (AIAC) has ruled that the Housing Development Corporation (HDC) of the Maldives must pay US$ 22.8 million to Malaysia’s WZR Property.
The Malaysian company filed for arbitration against Maldives government last September over an alleged breach of a contract made to build a 25-story office building in reclaimed suburbs of Hulhumale'. The building was to be built on the property on which the Finance Ministry building is located. The former government contracted a project to build the 25 floor office building in February 2016, and the US$ 123 million contract was signed with the Finance Ministry during March 2016.
However, the government made the decision to relocate the construction of the new building to Hulhumale'. At the time, the Finance Ministry had stated that the change of plans was based on advice from technical experts. While 20% of the project was completed in Hulhumale’ under the agreement with WZR, the government did not make any payments to the company, WZR said it its arbitration claim. After the new government began administration in 2018, the government decided not to go ahead with the project.
In an interview given to a Malaysian media, the company’s chairman said several attempts have been made to arrange the payment, with several letters sent to relevant authorities and several meetings with senior government officials. The company filed for arbitration after their unsuccessful attempts to negotiate with the MAldives government.
AIAC in its ruling issued on Sunday said invoices sent to HDC by WZR company in May 2018 remain unpaid. The due amount is equivalent to USD 22,823,432.68 and must be paid within 7 days.
