Civil Court Rules MNBC Debt to Medianet Cannot be Enforced Following Liquidation

The Civil Court has ruled that enforcement action cannot be taken against the Maldives National Broadcasting Corporation (MNBC) to recover a debt of more than MVR 1.3 million owed to Medianet, citing the company’s liquidation.

In a ruling delivered yesterday, the court noted that although it had previously ordered MNBC to pay the outstanding amount by 16 May 2024, the broadcaster could not be subject to enforcement proceedings as it had been liquidated in accordance with the law.

The debt arose from an agreement under which MNBC’s “Y TV” channel was carried on Medianet’s network. After MNBC failed to make the payment by the court-ordered deadline, Medianet sought an enforcement order to recover the money.

However, the Civil Court ruled that MNBC was liquidated on 1 July 2020 following a legal determination of its financial position. Under the liquidation process, a company’s transactions are required to be closed, and any outstanding debts must be assessed. Where debts exist, the Registrar of Companies must be informed and the matter referred to the court.

The Civil Court stated that, as a general rule, no enforcement action can be brought against a company once liquidation proceedings have commenced. On this basis, it ruled that Medianet could not enforce the judgment against MNBC.

While the court reaffirmed this legal position, the ruling did not specify what steps, if any, could be taken to recover the funds previously ordered to be paid.

MNBC was established to manage state media operations and was wholly owned by the government at the time of its operation.