Sun Travels & Tours has paid Hilton International Manage (Maldives) USD 31.2 million with interest as ordered by the International Court of Arbitration of the International Chamber of Commerce (ICC).

Hilton and Sun signed an agreement on February 27, 2009 to operate the Irfushi Beach and Spa Resort. After Sun terminated the agreement on April 30, 2013, Hilton filed a lawsuit against Sun with the International Court of Arbitration of the International Chamber of Commerce (ICC). On July 18, 2013, the ICC Court of Arbitration designated Singapore as the seat of arbitration.

After hearing the case, the Singapore Arbitration issued a "partial award" on 27 May 2015 and a "final award" on 17 August. Under that final award, Sun was ordered to pay USD 20,945,000 to Hilton. They were also ordered to pay a fine and additional costs.

Sun said in a statement today that Sun has now paid the money to Hilton and has paid a total of USD 31,252,874.46 in the amount and interest awarded to Hilton by the arbitration. Sun also had to spend USD 5.6 million, including legal and expert expenses and other related expenses, concerning the entire case.

The Irfushi Resort is located in Noonu Atoll and is a 221-room five-star resort developed at Sun's expense in Medhufushi Island and opened in August 2008. It is the first tourist resort opened in the Atoll.

Sun said in a statement that towards the end of 2008, Hilton expressed interest in managing Irufushi while Sun had run the property's operations successfully since inception. Hilton indicated the property was at a standard higher than other 'Hilton' branded resorts, and "only a name change to the resort would be required in terms of re-branding".

To initiate management agreement negotiations, Hilton offered initial projections estimating further profits if the resort operated under the "Hilton" brand name, but Sun rejected those projections and in response revised projections from Hilton showing even higher revenues were submitted by Hilton.

According to Sun, Hilton had changed the said numbers three times in a span of less than 30 days with the intention to induce "Sun into signing the Management Agreement, by fraudulently misrepresenting to Sun the profits" the resort would generate under Hilton's management.

Sun said Hilton also made changes to its 2011 and 2012 projections to demonstrate profitability, adding that if Hilton failed to achieve results, it would file for arbitrary contract termination during negotiations. Hilton is a company that manages luxury resorts, so Sun entered into the management agreement relying on the projections submitted by Hilton.

Sun was eventually forced to terminate the Management Agreement as Hilton had failed to rectify their breaches of the Management Agreement, and since Sun was incurring damages because of Hilton’s mismanagement of the Resort.

"By then, Sun was technically bankrupt because of Hilton’s fraudulent conduct throughout the Management Agreement. After the arbitration award was issued, Hilton used the media, various lobby groups and its overall influence to portray Sun in a negative light. It was portrayed to the public that Hilton financed the development of the Resort and that Sun had kicked out the “investor”. This was not the case. The fact of the matter is, a property fully financed and developed by Sun, which was at a standard higher than what Hilton was looking for at the time, was handed over to Hilton to manage, and Hilton failed miserably to achieve the figures that they had promised," the statement added.

Sun added that the decision to take back management of the resort from Hilton and cancel the management agreement was necessary to save a bankrupt company and to protect Sun's interests and maintain the company's image. The company will continue to seek further action and legal remedies to that end, seeking to recover from the damage caused by Hilton's fraud, deception and negligence in the operation of the resort.