Dispute over termination of Farukolhu airport contract reaches Supreme Court

The legal dispute over the decision to terminate a government contract to develop a domestic airport in Sh. Farukolhu has reached the Supreme Court.

Araam Travel Private Limited was contracted to develop an airport at Farukolhu on June 25, 2013, agreeing to a 50-year lease of G. A. Innahera, G. A. Medhahera, G. A. Mathuhera, G. A. Medhuburiya and G. A. Maafehela for tourism development as consideration for the airport development project.

However, the government terminated the contract in 2014, citing an Environment Impact Assessment report which warns of irrecoverable environmental damage in the project proceeds. The government also said that proceeding with the project as requested by Araam Travel would be a constitutional violation.

Araam Travel sued for compensation, but the Civil Court ruled in 2016 that the termination of the contract was lawful, and that the company is not entitled to compensation. The ruling was upheld upon appeal by the High Court in 2019.

Araam Travel has now appealed the decision with the Supreme Court, which held its first hearing in the case this Sunday.

The case is being overseen by a bench of three justices; Chief Justice Ahmed Muthasim Adnan, Justice Dr. Azmiralda Zahir, and Justice Ali Rasheed Hussain.

Farukolhu shares a lagoon with Sh. Funadhoo, and was declared an environmentally protected site on October 7, 2018. A domestic airport was later built in Funadhoo as an alternative, and is currently operational.