MVR 286 Million Fine Overturned By High Court

The verdict of the highest fine imposed by a Maldivian court in history has been overturned by the High Court. The verdict of the fine had been passed by the Civil Court in 2016, and it amounted to the sum of MVR 286 million.

The case had been about an agreement between two private parties which stipulated that a fine of MVR 286 million be paid as a penalty for not repaying a loan of a mere MVR 227,000. The 2016 Civil Court ruling had mandated that the amount be repayed in monthly payments of MVR 20,000. At that rate, the fine would have taken 1,000 years to be repaid.

The clause of the agreement had stipulated that 80% of the loaned amount would be incurred as a fine for every day that the repayment is delayed. When the Civil Court ruled on it, the repayment had not been completed for four years or more.

The case, appealed by both parties, was overseen by a panel of judges at the High Court who ruled that although the Shariah permitted fines in civil agreements, the fines should not be excessive. In the case of an excessive fine, the Court noted that the International Fiqh Academy had ruled that the overseeing court may reduce the value of the fines.

The High Court had also said that the fines may not exceed the amount that had been loaned out, and an amount that exceeds the original amount may only be permitted if the financial losses incurred by the creditor because of the delayed repayment could be proven. The High Court noted that the creditor could not prove that they had incurred a MVR 286 million cost because of the delayed repayment.

The High Court overturned the Civil Court's ruling that the MVR 286 million be paid, and instead ruled that the original MVR 227,000 be paid to the Court within one month.