The Supreme Court on 16 September 2013, in the appeal lodged by Nexbis Ltd., Australia against measures of the Anti-Corruption Commission (ACC) in the Maldives Immigration Border Control System (MIBCS), decided that contracts that are related to ‘public services’ are exceptional to the general rule which says that parties to a contract are bound as they have agreed to.

According to the Supreme Court, this new genre of ‘administrative contracts’ by their very nature provide the State or State Department the inherent rights and privileges in amending the terms of the contract. According to the Judgment, this includes contract or project monitoring, implementation, and taking related punitive measures against the other party. How the legal profession interprets this precedent, we are yet to see. One argument is that the decision grants states the right to manipulate multi-million dollar projects based on the will and fancies of political persons and forces without the necessary safeguards of the Courts. The other side of course relied on to the principles of state sovereignty and executive prerogative.

Husnu Al Suood, Mohamed Shahdy and Ismail Wisham from Suood & Anwar LLP represented Nexbis. The Anti-Corruption Commission was represented by its in-house counsel and the state was represented by the Attorney General.