The Maldivian government has resolved its dispute with Noomadi Resorts and Residences, out of court.

While the local company was contracted to develop housing units on multiple islands, the previous administration had terminated the agreement claiming “contractual violations.”

Noomadi denied that it had violated the agreement with the state, and had filed two arbitration cases at the Permanent Court of Arbitration, seeking USD 155 million in compensation.

The housing ministry, on Tuesday, announced that the government has signed a settlement agreement with Noomadi.

Noting that the decision to seek an out of court settlement was reached after discussions with the “settlement committee” formed by President Ibrahim Mohamed Solih to counsel on such matters.

The ministry added that the committee members agree that reaching out of court settlements “is the best way to proceed” in such cases.

The agreement to settle outside of the courtroom was signed on August 25, with the Maldivian government agreeing to pay USD 55 million to Noomadi Resorts and Residences as a “full and final settlement.”

Noomadi was contracted to develop 600 housing units under a private villa module, and the “Phase I” agreement was signed on 20th January 2011 during former President Mohamed Nasheed’s administration. A “Phase II” agreement was signed on 30th January 2013, to develop an additional 500 housing units, a police academy and water and sanitation systems in three islands.

Refuting allegations that it violated the agreement, an official from Noomadi had said that the contract was terminated because of a dispute that arose due to a contractual violation by the government. The official said that the government had taken back an island leased to the company, as per the contract, in order for them to develop it into a tourist resort.

Noting that all the arrangements made for the project had gone to waste, the official stressed that this was an immense loss for this company.