The Civil Court has issued an interim order preventing the Ministry of Tourism from enforcing its decision to terminate the head lease for Kihaadhuffaru in Baa Atoll, following a case filed by Athama Marine International, the island’s head-lessee.
According to filings, Athama stated that a ministry team had arrived on the island and demanded the keys, suggesting the state intended to take control of the property. The resort, operated under the brand Kihaa Maldives and subleased to Coral Islands (Maldives), has been entangled in a long-running compliance dispute with the government.
The Ministry of Tourism announced in August that the resort’s conditional operating licence had expired in September 2019, but the property continued to host guests without authorisation. It noted that Athama had twice been fined for operating without a valid licence and cautioned tourists against visiting the resort while “additional measures” were being pursued.
In its statement to the court, Athama acknowledged that the resort had fallen short of tourism standards but said that efforts were made to address compliance issues once identified by regulators. The company linked the decline in operations to the COVID-19 pandemic, noting that although permission to reopen was granted in December 2020, the resort required substantial renovation. It added that Coral Islands’ financial difficulties had prevented the payment of sublease rent.
A compliance inspection in December 2023 found issues including salary arrears, outstanding taxes, maintenance deficiencies, and lapsed facility registrations. Athama told the court that operations were halted immediately after receiving the ministry’s notice and that subsequent efforts were focused on obtaining necessary permits and addressing compliance gaps.
The Tourism Ministry had given a 15-day period to correct the deficiencies, but Athama contended that the notice itself violated the terms of the lease agreement.
The Civil Court, issuing the interim injunction in the absence of ministry representation, ruled that the case was urgent and that Athama risked irreparable harm if enforcement proceeded. The order postpones the ministry’s termination notice until 2 October 2025 and bars any enforcement actions that could affect third-party rights. The court also required the plaintiffs to file a substantive motion within the timeframe specified in the order.
Athama Marine International has held the lease for Kihaadhuffaru since August 1997 and told the court it has invested USD 56 million in the property over the past 28 years.
