After a three-year-long arbitration, international hotel chain the Hyatt Corporation has signed an agreement to pay the Urban Development Corporation of Trinidad and Tobago (UDeCOTT) $334 million which it owed to the State enterprise.
The multi-party agreement was signed last Thursday in Chicago, United States by three parties — UDeCOTT’s chief executive Kurt Ramlal, Rakesh Sarna, Executive Vice President, Group President – Americas for Hyatt Hotels and Shankar Bidaisee, a UDeCOTT director who is also chairman of the company’s Hyatt Committee.
However, according to the agreement signed, Hyatt expects that Finance Minister Larry Howai will first write a letter directing it to pay UDeCOTT the sums owed and confirming that UDeCOTT is the owner of the hotel.
“Promptly upon receipt by Hyatt of an executed copy of this agreement and Minister of Finance letter, Hyatt and UDeCOTT shall withdraw the claims and counterclaim relating to the arbitration,” the agreement stated.
Three years ago Hyatt Corporation, the manager of the Government-owned hotel on the Port of Spain Waterfront, initiated arbitration proceedings against UDeCOTT at the International Court of Arbitration for “multiple breaches” of its Hotel Management Agreement, which it signed in July 27, 2005.
Hyatt claimed that UDeCOTT’s transfer of its ownership interest and site (the property is leased from the Port Authority) to a subsidiary, the Port of Spain Waterfront Development Company Ltd (POSWDL) left it in doubt as to who was the rightful owner of some US$20 million in profits. Hyatt claimed it has been forced to place the funds in a separate account, pending resolution of this.
Hyatt had claimed that its ability to provide management services was “severely compromised”, as 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, the upgrade of infrastructure as well as the management of the parking garage next to the hotel.
POSWDL was not the only subsidiary company set up by UDeCOTT to manage its hotel business. UDeCOTT had also set up the International Waterfront Resources Ltd (IWRL) to staff the hotel.
In turn, UDeCOTT had counter claimed that Hyatt failed to pay distributions owed between 2008 and 2011 and Hyatt’s claim that it was unsure as to who the funds were entitled to was “misconceived”.
The arbitration was suspended last year for three parties—Hyatt, UDeCOTT and the Government—to work out a suitable multi-party agreement.
UDeCOTT and Hyatt then agreed to certain terms- that the government would provide a guarantee over the facility and that it would write to Hyatt stating that UDeCOTT was the rightful owner of the hotel. That settlement would have involved the grant of a guarantee by the government to the lenders in the Waterfront Project.
However, Howai had delayed a decision on the guarantee because he did not want to burden the Exchequer with additional debt.
Last Thursday’s agreement was executed without that guarantee.
“Hyatt acknowledged that it has been withholding Owner’s Remittance Amount since 27th August 2005. As of the date hereof, the total sum of Owner’s Remittance Amount, in accordance with the provisions of the Hotel Management Agreement is $334,825,703.19,” the agreement stated.
Hyatt committed to paying UDeCOTT sums owned within 120 days of signing of the agreement.
The parties also agreed to withdraw claims and counter claims from the International Chamber of Commerce.
Hyatt agreed to pay its costs and “reasonable” attorneys fees charged by UDeCOTT’s external counsel provided they do not exceed US$50,000.