Male’, Maldives – Allied Insurance company has requested High Court to grant an injunction in paying back USD 22 million (MVR 340 million) to Yacht Tours stating that paying it now would danger the future of the company.
The case filed at Civil Court by Yacht Tours claiming for the insurance compensation for the damages their resort Ha. Alidhoo Resort got, was ruled in favor of Yacht Tours in July of this year and Allied Insurance was ordered to pay an amount of USD 3.7 million per month and clear the full amount of USD 22 million within 6 months from the day of the verdict.
Following this ruling, Allied Insurance appealed the ruling at the High Court and during today’s initial hearing they requested for interim order in paying back to Yacht Tours until the High Court reaches a verdict stating that paying it now would danger the survival of the company.
Lawyer of Allied Insurance, Ahmed Muizzu said that any action against the company would affect the whole insurance industry of the Maldives and that it would impact the industry as a whole. He added that the normal practice of debt repayment is to freeze the accounts of a company and if such an action is taken against Allied Insurance, that it would affect the operations of the largest insurance company in the Maldives and that it might result in the business to stop.
“The service we provide to the customers would stop and the rights of those customers would be lost” Muizzu said.
He said that insurance business is based on the reinsurance trust and if that the court makes such a ruling, it would affect the reputation of the company and that the possible risk of the company being blacklisted by reinsurance companies was high.
On the contrary, Yacht Tours lawyers have requested Allied Insurance company’s accounts to be frozen and amount to be paid back. Yacht Tours had sent a letter to Civil Court on August 23, 2020 stating that Allied Insurance had failed to pay the amount of USD 3.7 million for the first month and that Allied Insurance had breached the court order. In the letter Yacht Tours requested the court to take necessary action so that Allied Insurance pays them as soon as possible.
On the fear of Allied Insurance’s accounts being frozen by Civil Court, the insurance company’s lawyers requested the High Court to grant the interim order as soon as possible as sometimes the lower court had taken action on companies even though the cases were appealed in High Court.
Another lawyer of the insurance company, Mohamed Shafeeu said that Allied Insurance was a bigger company which cannot sell off their assets and go in to hiding without paying the debts and that the company is regulated by the financial institutions including the central bank, Maldives Monetary Authority.
The bench of three which is hearing this case at High Court told that they would inform both parties of the decision they take regarding the interim order.