High Court suspends order on Dharumavantha Hospital tax dispute

High Court on Tuesday suspended a Civil Court order that required the government to reimburse Singapore’s Chang Hua Construction for taxes paid on the Dharumavantha Hospital project and instead directed the government to cover the tax costs.

Chang Hua Construction, which was contracted to build the 25-storey hospital in Male, had paid MVR 227,560 as Goods and Services Tax (GST) to the state. The company filed a lawsuit in the Civil Court, arguing that the project was awarded without tax considerations.

The Attorney General’s Office challenged the Civil Court’s ruling at the High Court and requested a stay on its execution.

The High Court issued an order suspending the ruling, stating that allowing it to proceed could obstruct justice.

A three-judge bench is presiding over the case, consisting of:

The project was awarded to Chang Hua Construction during President Abdulla Yameen’s administration, following an amendment to financial regulations that allowed it to bypass a public bidding process. The decision drew criticism from the opposition and the public over concerns about the project’s cost.

The Anti-Corruption Commission (ACC) previously investigated the contract and found no evidence of corruption. However, after changes in the commission’s membership under the new government, the case has been reopened.

At the time of the contract award, Mihaaru newspaper reported that China Harbour Engineering Company Limited, a subsidiary of China Communications Construction Company (CCCC) and builder of the Sinamale Bridge, had submitted a lower bid of $53 million (MVR 821 million). This was $86 million (MVR 1.3 billion) less than Chang Hua Construction’s offer.