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Singapore high court upholds verdict against Sun Travels

Fathmath Shaahunaz
21 February 2019, MVT 21:03
Iru Fushi resort, which was operated by Hilton International.
Fathmath Shaahunaz
21 February 2019, MVT 21:03

Singapore's Court of Appeal upheld the verdict of Singapore International Arbitration Centre ordering local firm Sun Travel and Tours to pay USD 26 million to renowned hotel chain Hilton International.

The management of Sun Siyam Iru Fushi Resort, which is owned by Maldives Development Alliance’s leader 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 ruled in favour of the former and ordered Sun Travels to pay USD 26 million to Hilton as damages for contract termination.

Following Sun Travel's appeal of the verdict, Singapore's Court of Appeal upheld the Arbitration Centre's ruling. Sun Travels requested the appellate court for a stay order on executing the Arbitration Centre's verdict, since cases regarding the Iru Fushi agreement are still ongoing in the courts of Maldives.

However, the appellate court decided that there was no credible reason for the prolonged delay in the trials ongoing in Maldives, and thus to uphold the Arbitration Centre's verdict.

Hilton International had filed at the court in Maldives to execute the Arbitration Centre's ruling soon after the verdict was announced. However, in the midst of Hilton’s lawsuit, Sun Travels had filed against the hotel brand 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 as compensation for damages caused in resort management.

Hilton had appealed the verdict, and the case is currently pending a decision at the High Court.

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

Furthermore, the International Chamber of Commerce's International Court of Arbitration has also supported the verdict of Singapore International Arbitration Centre.

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