Hilton rejects lower court verdict to compensate Sun Travels

Sun Siyam Iru Fushi Resort.

Sun Siyam Iru Fushi Resort.

Renowned hotel chain Hilton International declared at the High Court on Tuesday that the USD 16.6 million the Civil Court has ordered them to pay Sun Travel and Tours over Hilton’s mismanagement of Sun Siyam Iru Fushi Resort is not a valid 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 Hilton International in 2009 by Sun Travels. The local firm later terminated the agreement in 2013, sixteen years before the end of the contract.

Hilton had filed a lawsuit against Sun Travels at the Singapore International Arbitration Centre, which subsequently ruled in favour of the former and ordered Sun Travels to pay USD 26 million (MVR 400 million) to Hilton as damages for contract termination.

In the midst of Hilton’s lawsuit, Sun Travels had filed at the Civil Court, accusing Hilton of deceit and deception in their contract to operate Iru Fushi, thus violating their agreement in managing the resort. The lower court had ruled in favour of Sun Travels and ordered Hilton to pay USD 16.6 million (MVR 255 million) as compensation for damages caused in resort management.

At the first appeal hearing of the Civil Court’s verdict against Hilton on Tuesday, the hotel brand’s lawyer Shahdi Anwar stated that the Civil Court had taken on the case after the Singapore International Arbitration Centre already reached a verdict. He declared that the lower court cannot look into the case as Hilton’s agreement with Sun Travels includes a subject stating that conflicts between the two parties must be settled by the arbitration. Thus, Shahdi requested the High Court to overthrow the Civil Court’s verdict.

Shahdi further pointed out that the arbitration’s ruling states that Hilton International had not committed deceit in the resort contract, as Sun Travels claims. He again stressed that the arbitration has already issued a ruling on the case.

However, Sun Travel’s lawyer Ahmed Muizzu countered that the case at the Civil Court concerned Hilton’s deception in signing the Iru Fushi contract with Sun Travels, which is not related to the case investigated by the arbitration over Sun Travels breaking off the contract before the termination date.

Muizzu further asserted that the inclusion of an arbitration subject in the contract with Hilton International does not impede the domestic jurisdiction of Maldivian courts to look into the case, as per the Supreme Court’s ruling. Hence, he requested the High Court to uphold the Civil Court’s verdict for Hilton to compensate Sun Travels.

The Judges’ Bench comprising Chief Judge Abdulla Didi, Judge Abdulla Hameed and Judge Ali Sameer concluded Tuesday’s hearing after announcing that another hearing will be held later.

Hilton had previously filed at the Civil Court to implement the arbitration’s verdict ordering Sun Travels to compensate Hilton for breaking off the contract. After the lower court stated that the power to execute the arbitration’s ruling falls on the High Court, Hilton had appealed the case. However, the High Court had ruled that the authority to execute the verdict falls to the Civil Court again.

While Hilton International is working to obtain MVR 26 million from Sun Travels as per the Singapore International Arbitration Centre’s decision, Sun Travels declared earlier that the arbitration’s ruling cannot be executed as it is an invalid verdict.

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