Hilton to pay USD16 mln to Sun Travels over deceit in resort contract

Sun Siyam Iru Fushi Resort.

Sun Siyam Iru Fushi Resort.

The Civil Court on Thursday ordered Hilton International to pay USD 16.6 million (MVR 255 million) to Sun Travels and Tours over the former’s management of Sun Travel’s resort Sun Siyan Iru Fushi.

This verdict against Hilton International comes in the midst of Hilton’s lawsuit against Sun Travels at the Singapore International Arbitration Centre, which accuses the Maldivian company of breaking off their contract. Subsequently, Singapore Arbitration has ordered Sun Travels to pay USD 26 million to Hilton as damages for contract termination.

The lower court’s verdict against Hilton is over the latter committing deceit and deception in their contract with Sun Travels to operate Iru Fushi. Sun Travels accused Hilton of violating their agreement in managing the resort.

According to the verdict, Hilton had comprised a report on Iru Fushi Resort’s financial projection for 2010 to 2014 which was the duration of Hilton’s contract as the resort’s operator. The report, which included projections of the resort’s occupancy, average room rate and gross operating profit, had been worrying to Sun Travels, upon which Hilton had revised the report to project high profit for the resort and a guarantee that the targets can be achieved.

However, Hilton’s subsequent management of the resort had resulted in USD 16.6 million in damages to Sun Travels, according to the verdict.

Meanwhile, the Singapore Arbitration’s verdict which was in favour of Hilton is yet to be carried out. 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 in 2009. The agreement was later terminated in 2013 before the end of the contract.

Hilton had also filed at the Civil Court to execute the Arbitration Centre’s verdict for Sun Travels to pay USD 26 million. The lower court subsequently ruled at the end of last November that the Arbitration Centre’s decision can be implemented should the High Court uphold the centre’s verdict.

Representatives of Hilton had also met with top government officials to discuss the delayed execution of the Arbitration Centre’s sentence against Sun Travels.

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