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High Court overturns order for Hilton to compensate Sun Travel

Ahmed Aiham
06 July 2020, MVT 14:20
Sun Siyam Iru Fushi resort, which was previously operated by Hilton International. PHOTO: SUN SIYAM IRU FUSHI
Ahmed Aiham
06 July 2020, MVT 14:20

The Maldives' High Court on Tuesday, overturned the Civil Court's ruling against renowned hotel chain Hilton International to pay USD 16.6 million in damages to local firm Sun Travel and Tours, over violating the terms of their agreement in the former's management of Sun Siyam Iru Fushi resort.

Sun Travels had awarded the management of Iru Fushi, which is owned by Maldives Development Alliance’s leader and parliamentary representative of Meedhoo, Shaviyani Atoll, MP Ahmed Siyam Mohamed, to the globally renowned Hilton International in 2009. The local firm later terminated the agreement in 2013, sixteen years before the contract matured.

During the appeal of the court's decision, the High Court, in reference to the contract, moved to uphold the arbitration centre's findings that Sun Travel failed to prove that the agreement was null, based on claims that Hilton misrepresented facts to influence the contract signing.

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

The arbitration centre's decision was then successfully appealed at Maldives' Civil Court, which ordered Hilton International to pay USD 16.6 million to Sun Travels as compensation for violating the terms of their agreement to manage Iru Fushi.

According to the initial contract, disputes that arise between the two companies must be resolved through the Singapore International Arbitration Centre.

As a result of the agreement to resolve disputes at the arbitration centre, the High Court deemed that the Civil Court lacked legal jurisdiction over the matter.

The case was presided over the court's Chief Judge Shujau Usman, Judge Ali Sameer and Judge Hussain Shaheed.

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