The Edition


Power to execute arbitration order in Sun Travels-Hilton conflict falls to Civil Court

Fathmath Shaahunaz
20 April 2017, MVT 17:30
Water villas in Sun Siyam Iru Fushi Resort.
Fathmath Shaahunaz
20 April 2017, MVT 17:30

The High Court on Thursday ruled that the authority to execute Singapore International Arbitration Centre’s order for local firm Sun Travel and Tours to pay USD 24 million to Hilton International as compensation for breaking their contract falls to the Civil Court.

Sun Travels had awarded the management of Sun Siyam Iru Fushi Resort, which is owned by Maldives Development Alliance’s leader and Meedhoo MP Ahmed Siyam Mohamed, 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 be implemented should the High Court uphold that verdict. Hilton had appealed the Civil Court’s verdict at the High Court, stating that the Civil Court holds the authority to execute the arbitration's verdict as per the Maldives’ Arbitration Act.

In its verdict, the High Court referred to Subject 73 of the Arbitration Act which states that any arbitral awards settled by arbitration centres overseas can be implemented only if the authorised judicial court upholds that verdict. The High Court declared that the authorised judicial court in this sense is the Civil Court, according to the High Court’s regulations and execution policies of verdicts and court orders.

Sun Travels declared during the trials that it does not recognise the Arbitration’s verdict which the company described as invalid and therefore cannot be executed. However, Hilton International countered that Sun Travels had failed to object and appeal the arbitration’s verdict within the given time period and, thus, can no longer defy the verdict in court.

Meanwhile, in a separate case, the Civil Court has ordered Hilton International to pay USD 1.6.6 million to Sun Travels as compensation for violating the terms of their agreement to manage Iru Fushi resort. Hilton has appealed this case as well.