Court Reissues Injunction Blocking Kihaadhufaru Takeover

The Civil Court has again issued an interim order restraining the Ministry of Tourism from enforcing its decision to terminate the head lease for Kihaadhufaru Island in Baa Atoll, following a case filed by Athama Marine International, the island’s head lessee.

The latest order follows an interim injunction issued in October last year, which was valid for 14 days and required Athama to file a substantive motion within that period. Athama filed the motion, but the interim order lapsed at the end of the 14-day timeframe.

Athama requested a fresh restraining order after a Tourism Ministry team, accompanied by private security, arrived on the island last Wednesday. In its filing, Athama said the officials demanded the keys and indicated the state intended to assume control of the property. Resort management informed the court that they refused to hand over the keys or allow a takeover.

The resort, branded as Kihaa and operated under a sublease by Coral Islands (Maldives), has been at the centre of a prolonged compliance dispute. At the end of August 2025, the Tourism Ministry announced that the resort’s conditional operating licence had lapsed in September 2019 and that the property had continued hosting guests without authorisation. The ministry said Athama had been fined twice for operating without a valid licence and warned tourists against visiting while “additional measures” were being pursued.

In a statement to the court in October 2025, Athama acknowledged that the resort had fallen short of required tourism standards but said deficiencies were being addressed once raised by the regulator. The company attributed the deterioration to the COVID-19 shutdown, stating that although permission to reopen was granted in December 2020, significant renovation was necessary. Athama also said Coral Islands’ business had weakened to the point it could not meet sublease rent obligations.

Court documents cite a compliance inspection carried out in December 2023, which identified arrears in some employee salaries, unresolved tax issues, maintenance needs across the property, and lapsed facility registrations. Athama told the court that operations ceased on the day the ministry’s notice was served and that work since then has focused on obtaining permits and closing compliance gaps.

The Tourism Ministry had allowed 15 days after the notice period for issues to be corrected. Athama argues the notice itself breached the terms of the lease agreement.

Issuing the new interim injunction in the ministry’s absence, the Civil Court said the matter was urgent and that Athama risked irreparable harm without relief. The order states that the notice to terminate the agreement should be halted “until the court decides on the motion by the state questioning the jurisdiction of the court” in relation to the request for an order. It also directs that no enforcement action should proceed so as not to prejudice third-party rights.

In its response, the state argued that Athama’s board resolution authorising the case was signed in the absence of one of its directors, Nour T Beydoun. The state maintained that, even if the resolution were treated as valid, Athama lacked legal standing to bring the case because the legal requirements for adopting such a resolution had not been fulfilled. The state also pointed to statements made in an earlier case involving a director who alleged the company’s affairs were fraudulent.

The Civil Court ordered that the ministry’s notice should not be implemented and that no steps should be taken to seize the resort from Athama until a decision is reached on the state’s motion.