TT $150m. hotel battle
PORT OF SPAIN — Hyatt Corporation, the international hotel chain and manager of the government-owned hotel on the Port of Spain waterfront, has initiated arbitration proceedings against the Urban Development Corporation of Trinidad and Tobago at the International Court of Arbitration in Paris, France, for “multiple breaches” in its Hotel Management Agreement.
The International Court of Arbitration handles international commercial disputes and is part of the International Chamber of Commerce.
But in a counter-claim, UDeCOTT is also claiming breaches in the Agreement and is seeking over $150 million.
Hyatt signalled its intent to pursue the matter legally in December 2010 in a letter to UDeCOTT chairman Jearlean John and late last year filed papers seeking declaratory relief for harm caused by UDeCOTT’s multiple breaches of the Management Agreement, which it signed in July 27, 2005.
One of those breaches, the Hyatt claims, is the transfer of UDeCOTT’s ownership interest and site (the property is leased from the Port Authority) to a subsidiary, the Port of Spain Waterfront Development Company.
Hyatt claims this breach has left it in doubt as to who is the rightful owner of some US$20 million in profits.
The company said it has been forced to place the funds in a separate account, pending resolution of this uncertainty.
The hotel is claiming its ability to provide management services is “severely compromised”, as it has found itself with a “counterparty that has essentially absented itself from the project”.
In its arbitration claim, Hyatt states that UDeCOTT has refused to approve plans for the completion of the hotel and related services such as the construction of an additional food and beverage outlet and retail space which were to be constructed one year after the hotel’s opening, but this never occurred.
Hyatt claims UDeCOTT’s failure to discuss or approve the plan has negatively affected Hyatt’s provision of management services to the hotel.
“Among other things, the absence of the additional amenities means that the hotel cannot generate as much revenue as it otherwise would have been able to do. This, in turn, reduces the fees that Hyatt earns, since they are calculated as a percentage of revenues,” it stated.
Hyatt also claimed UDeCOTT’s failure to discuss the annual plan, operating budget and capital budget has left it without the ability to make proper low-cost maintenance and repairs. (Express)