Meedhoo MP and businessman Ahmed Siyam: Siyam is the main shareholder of Sun Travels. Photo/Sun

Sun ordered to pay $24m arbitral award to Hilton in 14 days

More than seven years after this case was pending in various courts across the country, the civil court finally decided to accept Singapore's arbitration award.

9 February 2023

By Aman Haleem

Civil Court has has accepted a Singapore arbitration ruling that awarded USD 24 million (MVR 368 million) in damages to Hilton International Management against Sun Travels and Tours for cancelling the contract for the Irufushi resort and ordered the local resort operator to pay the amount to the Civil Court within 14 days.

Sun Travels terminated the Irufushi deal on April 30, 2013, on the grounds that Hilton had breached the agreement. When the case of cancellation of the agreement was referred to arbitration in Singapore:

  • On August 17, 2015, the arbitrator issued a 'final award'; Sun Travels was asked to pay USD 20.9 million in fines and additional costs

  • When the division dealing with major cases related to property handed over the implementation of the award to the Civil Court, the court held that there was no jurisdiction

  • When the award case was referred to the Civil Court's sentencing division for the second time, it was decided that the verdict could be executed only after the High Court decides on the award

  • When the High Court was appealed with, the court set aside the Civil Court's ruling and declared that the "concerned court" as defined in the Arbitration Act was the Civil Court

  • When the award case came up in the civil court for the third time, the court ordered all accounts of Sun Travels be frozen

  • Challenging the civil court's orders, the High Court held that since the acceptance and implementation of arbitral awards are two stages, the two stages should be allowed separately.

More than seven years after this case was pending in various courts, the Civil Court on Sunday decided to accept Singapore's arbitration award and ordered the company to deduct the amount paid so far and pay the remaining amount, penalty and additional expenses within 14 days.

In the Civil Court too, Sun Travels had argued against accepting the arbitration award on the grounds that Hilton had committed fraud. The company had alleged in the court:

  • At the time of the agreement, Hilton assured that the cost of selling rooms and the money from running the resort would increase

  • But these are changes made by Hilton for the purpose of signing the agreement

Sun Travels also told the court that the awards were against the general policy of the state. It was also pointed out that the procedures for the implementation of the award were flawed as the accounts were withheld before accepting the award. 

In response, Hilton said Sun Travels was questioning Hilton's decision in the arbitration to prolong the case. It was also pointed out that the issue of fraud was also decided by the arbitration.

Judge Rizmeena Idhrees, who heard the case, noted that the court did not have the power to decide on the issue on which the award is based.

"While the highest court of Singapore has ruled on matters [relating to fraud] and held that the agreement between the two parties is valid and the country's highest court has ruled that no further charges can be made on the basis of the facts of the case, the court does not consider that there is a legal basis to re-enter into the contents of the case and examine [whether the agreement is valid or not]," the judgement read.

The court also said that Sun Travels could not explain the reasons for the violation of this arbitral award in accordance with the general policy of the state and that there was no legal or judicial basis to consider that there was a reason for banning the acceptance of this arbitral award in the Maldives.

Sun Travels is a company owned by Meedhoo MP and businessman Ahmed Siyam. Ever since Irufushi was taken from Hilton, the resort has been operating under the 'Sun Siyam' branding.