Fresh legal blows traded in Viceroy Palm hotel dispute

Five's Mulchandani refers dispute to Dubai Joint Judicial Committee

The fight for control of the US$1.2 billion Viceroy Palm Jumeirah hotel and residences in Dubai between Five Holdings and Viceroy Hotel Group went into its third round yesterday, as the two rivals traded another flurry of legal blows.

,Kabir Mulchandani, the chief executive of Five Holdings, issued a brief statement indicating that his company, which built the hotel, had filed a case with the Dubai Joint Judicial Committee – an arbitration body set up last year to resolve disputes between Dubai and Dubai International Financial Centre (DIFC) Courts – to have a management agreement between Five and Viceroy Hotel Group declared null and void.

Mr. Mulchanandi's move was apparently in response to actions by Viceroy last week, when it secured an injunction from the DIFC Courts barring Five from taking any further action to prevent Viceroy's Palm Jumeirah managers from resuming the running of the hotel.

The dispute stems initially from Five’s action the week before the injunction was issued, when Five had Viceroy’s regional president, Anton Bawab, and other staff forcibly removed from their offices. At the same time, the company issued a statement creating a new “Five Hotels and Resorts” brand, whose principal asset is the Viceroy Palm Jumeirah.

The Five hotels chief executive Aloki Batra was quoted lamenting that “the people who actually provide a hospitality experience never receive the real benefits while most of the commercial benefits are taken in most cases by operators. This needs to change”.

In his statement yesterday, Mr. Mulchanandi said: “We will take all steps to ensure the interests of the hotel’s employees, guests, investors, and stakeholders.” But neither he nor the company have clarified what the legal basis is for tearing up the management agreement with Viceroy.

Viceroy representatives said yesterday that the DIFC Courts injunction stands, and that it will be taking whatever action it needs to reinstate its managers.

A statement from Viceroy chief executive Bill Walshe said: “We maintain our position that Viceroy has always been, and remains, the legal manager of the Viceroy Palm Jumeirah Dubai. We are deeply disappointed that the owner of the hotel refuses to recognise this, despite the orders of the DIFC Courts.”

Mr. Walshe added that “such actions threaten the entire business community in Dubai” because of the confusion it causes to all concerned and the apparent defiance of the DIFC Courts.

The Viceroy Hotel Group is 50 per cent owned by the Abu Dhabi strategic investment firm Mubadala Investment Company, which is chaired by Crown Prince Mohammed bin Zayed, Deputy Supreme Commander of the UAE Armed Forces. Mubadala is expected to announce shortly that it will acquire the other half of the group that it doesn’t already own.

The Viceroy group says it signed in 2013 a long-term agreement to manage the Dubai hotel, which opened with great fanfare in March.