Civil Court orders Hilton to pay US$ 16 million to Sun Travel
Arbitration went in favor of Hilton
MP Siyam with President Yameen
Civil Court had ordered Hilton Worldwide to pay US$ 16 million to Sun Travels over the takeover of Irufushi Resort. The case had been submitted to Singapore arbitration, which had found in favor of Hilton Worldwide.
Irufushi Resort is now operating as The Sun Siyam Irufushi, owned by Meedhoo Constituency MP and Leader of Government coalition partner MDA, Ahmed Siyam Mohamed. Singapore’s arbitration had decreed that Sun Travels had violated the agreement made with Hilton and had taken over the resort illegally. Arbitration had ordered Sun Travels to pay US$ 24 million (MVR 370 million) to Hilton.
Sun Travel had filed suit in Civil Court, claiming that the agreement was made on fraudulent terms and to recover the losses caused by the initial agreement.
The hearing was scheduled for Thursday. However, the hearing did not appear on the official table and the verdict was not uploaded to the Court’s website.
The Civil Court verdict stated that Sun Travels had serious concerns over the initial projections raised by Hilton for a period of five years. A revised projection, had inflated occupancy rates, room rates and profits for the period.
The verdict stated that the initial agreement between the two parties were based on these projections. However, the verdict said that Hilton had failed to reach their targets during this period and had failed to offer a reason for the low performance.
Civil Court verdict stated that Hilton had failed to prove evidence beyond doubt that the projections were based on real terms. As such, there was enough room to judge that the projections were merely used as a tool to just sign the agreement, on fraudulent terms.
The verdict says the agreement had been effectively nullified under clause 13 of the Contract Act, referring to clauses 12 and 16 of the same Act and under the rights granted to Sun Travel as per the Act. Additionally, the verdict said that due to the fraudulent nature of the agreement, Sun Travels have to be compensated for their financial losses as per clause 23 of the same Act.
Therefore, Civil Court had ordered Hilton to pay US$ 16 million within a period of six months.
The island was handed over to Hilton Worldwide in 2009 and taken over in 2013.
Hilton had also filed suit against Sun Travels to implement the arbitration ruling. However, Civil Court had this month decreed that due to the arbitration laws, only High Court can make a decision on the ruling.
