The Maldives has become a premier destination for tourism and foreign investment. To foster foreign investment and provide efficient solutions for commercial disputes, the Maldives have introduced significant legal reforms, including the establishment of the Maldives International Arbitration Centre (MIAC) and the enactment of the Arbitration Act 2013. MIAC offers investors a reliable and efficient dispute resolution mechanism as an alternative to traditional court litigation for resolving disputes.

This article provides an overview of the arbitration framework in the Maldives, highlighting MIAC’s structure, fee schedule, and the benefits of arbitration for foreign investors. Additionally, it discusses the Maldives’ commitment to the New York Convention, which ensures the global enforceability of arbitration awards.

Development of Arbitration in the Maldives

The Arbitration Act 2013 and Establishment of MIAC

The Maldives began its path toward a developing reliable arbitration framework with the enactment of Arbitration Act 2013. This legislation aligns with international standards, providing a legal basis for impartial, transparent, and effective dispute resolution. In 2019, the Maldives International Arbitration Centre (MIAC) was established, offering a neutral forum for both domestic and international arbitration.

Key Provisions of the Arbitration Act 2013

• Party Autonomy: The Act allows parties to choose their arbitrators, define procedural rules, and select the language of arbitration. This flexibility is particularly beneficial for foreign investors, who appreciate the ability to tailor the arbitration process to their needs.
• Procedural Transparency: The Act sets clear guidelines for arbitration proceedings, ensuring fairness and impartiality, which helps build confidence among foreign investors unfamiliar with the local legal system.
• Enforcement of Awards: Arbitration awards are enforceable within the Maldives, subject to limited grounds for challenge, ensuring that arbitration outcomes will be upheld by the courts.

Maldives International Arbitration Centre (MIAC): Structure and Services

The Role of MIAC in Arbitration

MIAC was established as an independent government institution, dedicated to facilitate both domestic and international arbitration. It serves as a reliable, neutral platform for dispute resolution, providing foreign investors an alternative to court litigation that is efficient, cost-effective, and transparent.

Qualified Arbitrators

MIAC maintains an extensive panel of arbitrators, comprising experts in fields such as commercial law, maritime disputes, and hospitality. This diverse pool of arbitrators ensures that investors have access to arbitrators with deep knowledge of the complexities involved in different industries, fostering confidence in the arbitration process.

• Primary List of Arbitrators: Includes arbitrators skilled in commercial and international arbitration, ensuring that disputes are overseen by experts aligned with investors’ needs.
• Secondary List of Arbitrators: MIAC’s secondary list offers additional specialized expertise, allowing investors to select arbitrators with knowledge specific to their industry.

MIAC’s Rules of Arbitration

MIAC’s Rules of Arbitration govern the conduct of cases from initiation to final award, establishing a structured and efficient framework for proceedings. Key aspects include:

• Case Management: MIAC employs a structured approach to case management, with defined timelines for submissions, responses, and hearings. This focus on efficiency minimizes delays, delivering faster resolutions than traditional litigation.
• Confidentiality: MIAC’s rules include strict confidentiality provisions to protect sensitive business information, which is crucial for industries where reputational risks are significant.
• Interim Measures and Emergency Arbitrator: MIAC allows for interim measures and emergency arbitration, providing a mechanism for protecting parties’ interests before the final award.

MIAC Fee Structure

The Maldives International Arbitration Centre (MIAC) offers different fee schedules for domestic and international arbitration, allowing flexibility based on the nature and scope of the dispute.

Fees for a Domestic Arbitration

• Registration Fee: No fee.
• Administrative Fee: No fee.
• Arbitrator’s Fee: The maximum fee payable to each arbitrator is MVR 50,000 (Fifty Thousand Maldivian Rufiyaa).
• Booking Charge:
  • MVR 500 (Five Hundred Maldivian Rufiyaa) for use within official hours (8:00 am to 2:00 pm).
  • An additional MVR 500 (Five Hundred Maldivian Rufiyaa) for use beyond office hours.

Fees for an International Arbitration

• Registration Fee: USD 500 (Five Hundred US Dollars) for cases administered by MIAC.
• Administrative Fee: USD 1,500 (One Thousand Five Hundred US Dollars) for cases administered by MIAC.
• Arbitrator’s Fee: Based on the sum in dispute, as outlined below.

• Booking Charge:

• • USD 33 (Thirty-Three Dollars) for use within office hours (8:00 am to 2:00 pm).
  • An additional USD 33 (Thirty-Three Dollars) for use beyond office hours.

For detailed and current information, please refer to MIAC’s official Schedule of Fees.

Maldives’ Accession to the New York Convention

In 2019, the Maldives acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which enhances the Maldives’ appeal as a venue for international arbitration. With over 170 signatories, the Convention ensures that arbitration awards issued by MIAC are recognized and enforceable in other member states.

Advantages of Arbitration for Foreign Investors

• Faster Resolution of Disputes: Arbitration generally offers a faster resolution than traditional court proceedings. MIAC’s structured case management minimizes delays, ensuring more timely dispute resolutions.
• Confidentiality: MIAC’s strict confidentiality provisions help protect sensitive business information and corporate reputation, which is crucial in industries where public disputes could negatively affect relationships and market perceptions.
• Access to Expert Arbitrators: MIAC’s panel of arbitrators includes experts in international arbitration and specific sectors like maritime law and tourism, providing investors with professionals who understand the complexities of their cases. which can lead to more accurate and fair outcomes.
• Predictable Costs: MIAC offers a transparent fee structure, helping investors forecast the costs of arbitration, which can avoid the financial uncertainties often associated with traditional litigation.
• Global Recognition and Enforcement: The Maldives’ accession to the New York Convention ensures that MIAC awards are enforceable internationally, providing investors with confidence that arbitration outcomes will be respected and executed across multiple jurisdictions.

Conclusion: A Growing Arbitration Hub in South Asia

The Maldives is establishing itself as a growing arbitration hub in South Asia, with MIAC playing a crucial role in this development. Backed by the Arbitration Act 2013 and Maldives’ commitment to the New York Convention, MIAC offers a modern, investor-friendly arbitration environment focused on efficiency, fairness, and global enforceability. While the Maldives is not yet a member of the International Centre for Settlement of Investment Disputes (ICSID), its progress in establishing a reliable arbitration system positions MIAC as a preferred choice for foreign investors seeking dispute resolution in the Maldives.

As the Maldives continues to enhance its arbitration capacity, MIAC’s role in attracting and protecting foreign investments is expected to grow, contributing to a secure and dynamic investment landscape.

References

1. Maldives International Arbitration Centre, ‘Maldives Arbitration Act’
2. Avas, ‘MIAC Launch: Facilitating Commercial Arbitration in the Maldives’
3. United Nations Information Service, ‘Maldives Joins the New York Convention, Enhancing the Enforcement of Arbitral Awards’ (2019)
4. Maldives International Arbitration Centre, ‘MIAC Rules of Arbitration’
5. Maldives International Arbitration Centre, ‘MIAC Schedule of Fees’
6. Aceris Law, ‘Arbitration in the Maldives: An Overview’
7. Aceris Law, List of Contracting States to ICSID Convention 2022