Arbitration order to compensate Hilton cannot be executed: Sun Travels

Tourists walk up a jetty in Sun Siyam Iru Fushi resort. PHOTO/IRU FUSHI

Tourists walk up a jetty in Sun Siyam Iru Fushi resort. PHOTO/IRU FUSHI

Local firm Sun Travels and Tours declared in the High Court on Monday that Singapore International Arbitration Centre’s order for the company to pay USD 24 million to Hilton International as compensation for breaking the contract awarding operations of Sun Siyam Iru Fushi Resort to Hilton cannot be executed as it is an invalid verdict.

The management of Sun Siyam Iru Fushi Resort, which is owned by Maldives Development Alliance’s leader and Meedhoo MP Ahmed Siyam Mohamed, was awarded to the globally renowned Hilton International in 2009. The agreement was later terminated in 2013 before the end of the contract.

Hilton International had filed a lawsuit at Singapore International Arbitration Centre which had ultimately ruled that Sun Travels and Tours is to pay USD 24 million (MVR 370 million) to Hilton as damages. Hilton had then filed at the Civil Court of the Maldives to execute the Arbitration Centre’s verdict. The lower court subsequently ruled that the Arbitration Centre’s decision can only be implemented should the High Court uphold that verdict and handed over the case to the High Court.

Sun Siyam Iru Fushi Resort.

Sun Siyam Iru Fushi Resort.

Speaking at the hearing held at the High Court on Monday, Hilton International pointed out that the Maldives’ Arbitration Act states that the Civil Court holds the authority to execute the arbitration’s verdict, which Sun Travels also conceded to. However, Sun Travels and Tours’ lawyer Ahmed Muizzu stated that the Arbitration Centre’s verdict conflicts with the general policy of the Maldives and thus is invalid and cannot be executed.

Hilton International’s lawyer Shahdi Anwar countered that international arbitration centres’ verdicts should be appealed within three months should either party disagree with the rulings. Noting that Sun Travels had failed to appeal accordingly within the given period, he stated that Sun Travels cannot defy the verdict in court now.

In response, Sun Travel’s lawyer Muizzu stated that defendants may challenge arbitration centres’ verdicts in two ways. One way, he noted, is to file a lawsuit as a separate case in court, while the second is to challenge the verdict when the plaintiff files to execute the arbitration’s order.

Muizzu declared that Sun Travels had challenged the verdict at the Civil Court, but said he did not want to go into details right then.

Muizzu further referred to the lawsuit that Sun Travels had filed earlier against Hilton International over committing deceit and deception in their contract to operate Iru Fushi resort. Sun Travels accused Hilton of violating their agreement in managing the resort and the Civil Court had ruled in favour of the former in February this year, ordering Hilton to pay USD 16 million to Sun Travels as compensation.

Aerial view of Sun Siyam Iru Fushi Resort. PHOTO/IRU FUSHI

Aerial view of Sun Siyam Iru Fushi Resort. PHOTO/IRU FUSHI

Hilton’s lawyer Shahdi responded that Hilton has already appealed the Civil Court’s order at the High Court, refusing to recognise the verdict.

Shahdi pointed out that the current case at the High Court is to determine whether the Civil Court can take on the case to execute the arbitration centre’s verdict against Sun Travels. Noting that Sun Travels also agrees that the Civil Court is responsible for its execution and that Hilton has been seeking the verdict’s execution for a year and half, Shahdi requested the High Court to settle that the Civil Court can take on the execution case.

The Judges Bench comprising Chief Judge Abdulla Didi, Judge Abdulla Hameed and Judge Ali Sameer concluded Monday’s hearing and announced that the verdict will be read in the next hearing.

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