Oxfordshire 0X9 3AT
Mrs. Christine Lécuyer-Thieffry
Thieffry & Associés
29 rue de Lisbonne (and as of 1st May 2015, 32 rue de la Bienfaisance)
Tel.: +33 1 45 62 45 54
Facsimile: +33 1 42 25 80 07
Professor Michael Pryles
530 Collins Street
Tel.: +61 3 8644 3880
Facsimile: +61 3 8644 3881
Mr. Robin Dicker QC
3-4 South Square
London WC1R 5HP
Tel.: +44 (0)20 7696 9900
Facsimile: +44 (0)20 7696 9911
19.1 All disputes arising in connection with this agreement shall he finally settled under the Rules of Conciliation and Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said rules;
19.2 The Laws of Morocco shall he applied;
19.3 The place of arbitration shall be London, England and the language shall be English;
19.4 This agreement shall be signed in English and French versions. In the case of any inconsistency, the English version of this agreement shall prevail.
(a) all of the Claimant’s claims against the Second Respondent in this Arbitration have been discontinued as of 4 February 2014;
(b) the Second Respondent's claim for costs, including the costs of Travelodge’s Application for costs, are reserved to the Final Award;
(c) the Second Respondent shall remain a Party to this Arbitration until determination of its claim for costs against the Claimant.
a) Within 31 days of the date of this Order, the First Respondent shall hand back the possession, operation and business of the Hotel to the Claimant together with all furniture, fixtures and equipment including kitchen equipment, carpets, curtains, wall covering and other similar movable assets; Loose Equipment and Stocks (other than stationery and similar printed materials bearing the First Respondent’s name or any other names or trade marks then used by the First Respondent in its business) as may then be in existence in relation to the Hotel’s business (the "Handover Date").
b) Within 14 days of the Handover Date, the First Respondent shall (a) provide to the Claimant a full financial statement, including the closing balance sheet and profit and loss account of the business as at the Handover Date, and (β) account to the Claimant for all payments of whatsoever nature made by the First Respondent since 31 December 2012.
c) Within 30 days of the Handover Date, the Claimant and the First Respondent shall (a) agree on and provide to the Arbitral Tribunal (or in the absence of agreement the Claimant shall provide to the Arbitral Tribunal) an inventory of Stocks as contemplated by Article 16.1 of the Management Agreement as well as any receivables or cash pertaining to the First Respondent management period, and (β) provide to the Arbitral Tribunal a joint Statement of Condition, provided that if the Claimant and the First Respondent cannot agree such a statement, each of them shall provide its own Statement of Condition.
d) Subject to the provisions of sub-paragraph (e) below, the First Respondent shall take all necessary steps to terminate or assign as at the Handover Date to the Claimant (subject to the Claimant's consent to any assignment) all contracts entered into by the First Respondent with third parties relating to the Hotel, save that all contracts with any member of the Starwood Group shall be terminated and shall not be assigned. Any obligation of the First Respondent that has accrued prior to the Handover Date or that has not been assigned to the Claimant as at the Handover Date shall remain the responsibility and liability of the First Respondent.
e) The Claimant and the First Respondent shall take all necessary steps to assign by law all existing contracts of employment with the First Respondent relating to the Hotel to the Claimant or to any duly appointed assignee taking over the management of the Hotel (as notified by the Claimant). For the avoidance of doubt, this provision shall not apply to any employees employed or contracted by the Starwood Group or any other third party involved in the operation and management.
f) The Claimant and the First Respondent shall take all practical measures needed to effect an orderly handover of the Hotel’s business, including with respect to the transition of hotel guest and reservation data.
g) Subject to and until further determination by the Arbitral Tribunal, the Management Agreement shall be deemed to have been terminated no later than the Handover Date.
h) Other than as provided therein, this Order shall not affect any rights, remedies, obligations or liabilities of the Parties, including the right to claim damages for any beach of the Management Agreement.
i) The First Respondent shall desist from making any payments to any party (including under the Operating Agreement between Woodman Maroc Sarl and Starwood (M) Hotels Inc) until the Arbitral Tribunal has issued its final award on liability, save that payments may be made: (a) with the express consent of the Arbitral Tribunal pursuant to an express request for permission to pay notified to the Arbitral Tribunal and the Claimant; or (β) to discharge the First Respondent's liability to pay reasonable sums for legal advice received or to discharge its liability to pay employees' wages or utilities' charges accrued prior to the Handover Date.
j) The costs of the Application shall be determined by the Arbitral Tribunal in the Final Award.
(a) Woodman Maroc and CGHA agreed on (i) the inventory of stocks and its valuation at MAD 563,157.58 (EUR 53,850.41) the corresponding invoice being booked in CGHA’s accounts after set off against the amounts owed to CGHA by Woodman,23 and on (ii) all receivable and cash pertaining to Woodman’s management period,24 and
(b) CGHA took over all existing contract of employment.25 They did not agree a joint statement of condition which was prepared by CGHA against the Mace Report.26
(a) in failing to pay the quarterly fees provided for by Article 5 of the Management Agreement from December 2012 to 20 October 201429, the date on which operation of the Hotel was in fact handed back to CGHA;
(b) in failing to maintain and operate the Hotel to the standard and stature of a five star international hotel in breach of Article 7.2 of the Management Agreement, and/or
(c) in failing to perform the Management Agreement in good faith.30
(a) a declaration that the First Respondent, has breached the Management Agreement in that:
(i) it breached its payment obligations under Article 5 of the Management Agreement from 1 October 2012 up to the Date of Handover;
(ii) it breached its obligations under the Management Agreement to maintain the interior of the Hotel, the Fixed Plant and FF&E and to operate the Hotel to the standard of a five-star international hotel; and
(iii) it breached its Moroccan law good faith obligation to perform the Management Agreement in good faith;
(b) a declaration that the Management Agreement was terminated either on 8 January 2013, or, alternatively, as at 19 October 2014 (at the latest);
(c) an award that the First Respondent, pay to CGHA:
(i) damages in the amount of MAD 96,353,371 or such sum as may be determined being the loss of revenue since 2005 up to the Date of Termination as a result of the Hotel being maintained by Woodman at a standard less than an international five-star standard (which figure includes the loss of fees resulting from the First Respondent’s breach of Article 5 in the amount of MAD 46,264,266);
(ii) alternatively, in the event that damages claimed at (i) above are not awarded, damages in the amount of MAD 46,264,266 or such sum as may be determined being the loss of unpaid fees under the Management from October 2012 to the Date of Termination;
(iii) damages in the amount of MAD 372,382,996 or such sum as may be determined being the costs of returning the Hotel to an international five-star standard;
(iv) damages in the amount of MAD 94,644,505 or such sum as may be determined being the loss of the value of the Hotel’s brand as a result of the maintenance and operation of the Hotel at a standard less than an international five-star standard;
(d) an award that the First Respondent pay simple interest at a rate of 6% simple interest per annum on all amounts awarded that remain unpaid 21 days after the date of any award to the date of payment;
(e) an award that the First Respondent pay all the costs of this Arbitration incurred by the Claimant, including the Claimant’s legal costs and any costs incurred in relation to the Second Respondent;
(f) an award that all claims advanced by the First Respondent in the Arbitration are dismissed; and/or
(g) any other relief that the arbitral Tribunal deems just and appropriate to grant in the circumstances.
(a) dismiss the Claimant’s claims;
(b) order the Claimant to pay the costs of the Arbitration, including the administrative fees and costs of the ICC, the fees and expenses of the arbitral Tribunal and of any experts appointed by it, and the First Respondent’s costs, fees and expenses, legal or otherwise, reasonably incurred in connection with this Arbitration; and
(c) grant the First Respondent such further or other relief as may be appropriate.
(a) declaring that all of the Claimant’s claims against the Second Respondent in this Arbitration have been discontinued;
(b) declaring that the Arbitration is only proceeding between the Claimant and the First Respondent; and
(c) ordering the Claimant to pay Travelodge the sum of GBP 230,027.18 together with simple interest at the rate of LIBOR + 1% (alternatively at such rate as the arbitral Tribunal deems fit pursuant to Article 49 of the English Arbitration Act 1996) from the date the award is rendered until the date the award is satisfied in full.
(a) all of the Claimant's claims against the Second Respondent in this Arbitration have been discontinued as of 4 February 2014;
(b) the Second Respondent’s claim for costs, including the costs of Travelodge’s Application for costs, are reserved to the Final Award;
(c) the Second Respondent shall remain a Party to this Arbitration until determination of its claim for costs against the Claimant.
- a minimum annual fee (the "Minimum Fee") to be paid quarterly on arrears at the end of each quarter, the amount of which was revised as of 1 April 199142 and as of 1 April 2000 and fixed, as from that later date, to an amount not lower than MAD 20,500,000.0043;
- a profit share (the "Profit Share") of 50% of the "Hotel Profits" as defined in Exhibit 1 to the Management Agreement (if any) for each year after deducting the Minimum Fee for that year.
- "the Owner shall decorate and maintain and keep in good and substantial repair and condition and when necessary renew or renovate the Structure of the Hotel";
- "the Manager shall decorate and maintain and keep in good and substantial repair and condition the interior of the Hotel, the Fixed Plant, FF&E, and Loose Equipment and shall when necessary renew the Fixed Plant FF&E and Loose Equipment."
(i) the current services offered by the Royal Mansour fail to meet the level of services reasonably expected from an international 5 star hotel, particularly in terms of:
a. furnishing, decoration and layout which state is inadequate for an international "5 star" luxury hotel;
b. bathrooms and toilets;
c. staff number.
(ii) the current services offered by the Royal Mansour appear to be well below those offered by its two closet international '5 star' direct competitors:
a. the Hyatt Regency, located in Place des Nations Unies;
b. the Sofitel Casablanca, which opened in 2012 and became the reference for many European businessmen met there.64
All commitments must be performed in good faith and bind not only for that which is expressed, but also to all the consequences which the law, the usages or fairness draw from the commitment according to its nature.79
Where the debtor is given notice of default, the creditor has the right to compel the debtor to perform its obligation if the performance is still possible failing which it may request the cancellation (termination) of the agreement, along with damages in both cases.
When the performance is only partially possible, the creditor may require, either the performance of that part of the obligation which it is still possible to carry out or the cancellation (termination) thereof, with damages in both cases.
In any event, the rules relating to special contracts shall apply.
The cancellation (or termination) does not operate as of right but must be pronounced in court.
The damage is the actual loss that the creditor has proven and the profit of which he was deprived, which are the direct result of the breach of the obligation. The assessment of special circumstances in each case remains in the discretion of the court: the court must assess differently the extent of the damages, whether it results from the fault of the debtor or from his dol.
(a) a steady decrease in the level of activity in contrast with the expansion of the ‘5 star’ hospitality market. Abergel observed:
(i) in terms of overnight stays, a continuous and material decline in overnight stays of the Hotel with a Compound Annual Growth Rate ("CAGR") of -3.8%, as opposed to the strong growth trend of its relevant market with a CAGR of 7.3%;
(ii) in terms of Occupancy Rate ("OR"), a continuous decline in the OR and falling trend of the Hotel (53% in 2013 vs. 72% in 2005) as opposed to the growth trend of the OR of its relevant market (67% in 2013 vs. 57% in 2005);
(iii) in terms of Average Daily Rate ("ADR"), a growth of the ADR until 2008 followed by a continuous and steep decline ever since and over the period 2005-2013 as well as a negative CAGR of the ADR of the Hotel of-1.2%;
(iv) in terms of turnover ("T/O"), sales growth until 2007 followed by a continuous and steep decline ever since and since 2007, a very negative CAGR of sales of the Hotel of -5.6%.
(b) an acceleration of the loss of competitive position since 2010-2011 compared to the market of ‘5 star’ hotels due to the evolution of the competition and the development of ‘5 star’ hotels in Casablanca which has known the renovation of two ‘5 star’ establishments (Palace d'Anfa and Mövenpick), the opening of a new ‘international 5 star’ establishment (Sofitel) while all other ‘5 star’ hotels, whether local or international, had undergone recent renovation works between 2004 and 2008. For Abergel, the impact of the lack of renovation of the Hotel explains the loss and competitive positioning since 2010-2011 which is shown by (i) a continuous decline in OR and negative trend since 2011 for the Hotel (-4.4%) completely diverging from the strong growth in OR and positive trend (+2.6%) of its relevant market since 2011; and (ii) in terms of average Revenue Per Available Room ("RevPAR" = OR x ADR) since 2010 a negative CAGR in RevPAR of the Hotel of -3.4% diverging from the strong growth trend of its relevant market since 2010 with a RevPAR CAGR of +6.8%. The loss of competitive positioning can only continue and increase in the short term in view of the announced opening in 2015 and 2016 of three new ‘5 star’ luxury international establishments (the Four Season, the Oberoi and the Marriot).115
(a) a loss of revenue from 2005 to the Handover Date in an amount of MAD 96,353,371 (EUR 8,759,397), which loss of revenue includes the loss of fees resulting from the breach of Article 5.3;
(b) the costs of renovating the Hotel to the international five-star standard;
(c) the loss of value of the brand of the Hotel estimated at MAD 94,644,505 (EUR 8,604,046).
(a) identifying a benchmark for luxury hotels (four-star/five-star) in Casablanca: for comparison of RevPAR which, according to Abergel, is the unanimously recognised hotel business indicator (RevPAR = OR x ADR);
(b) analysing and restating the selected relevant benchmark in order to have a benchmark of only five-star (international/local) hotels;
(c) estimating the adjustment coefficient for each year to reflect the evolution of the five-star (international/local) hotel market in Casablanca;
(d) estimating the supplementary adjustment coefficient to reflect the international five-star hotel standard only;
(e) applying the above coefficients to actual sales of the Hotel to estimate theoretical sales for each year (from 2005 to 2014);
(f) estimating a normalised profit and loss account established by reference to prevailing market standards/ratios for international five-star hotels; and
(g) assessing the theoretical profit before taxes in order to assess the theoretical minimum royalty fees and profit sharing under the Management Agreement.
Cost of restoring the Hotel to the five-star standard MAD EUR
- Urgent renovation works 1,724,015 156,729
- Operation of the Hotel during studies and consultation -3,659,286 -332,662
- Costs of studies and business consultations 7,500,000 681,818
- Renovation works necessary to restore the Hotel 272,833,143 24,803,013
- Operating loss throughout the duration of the works (2 year) 69,144,318 6,285,847
- Costs of reopening and persistent operating loss (1 year) 24,840,807 2,258,255
Total 372,382,997 51,216,443
- its building date, with a presence in Casablanca since the start of the 1950s;
- its strong national identity in Morocco;
- its association with an owner of international renown;
- the excellence that has been associated with it for fifty years in Casablanca;
- the excellence that is associated with it today in Marrakech;
- its international renown;
- its elitist reference, versus "chain" hotel brands, such as Mercure, Pullman or Méridien.127
(a) the deterioration of the premises and the operating conditions of the Hotel which led the Manager to apply prices lower than the standard of the international five-star hotel category and an inadequate long term cost management policy evidenced by a poor rating on Trip Advisor (3.5/5 and 62% of positive feedback versus 4.5/5 and 90% for the Royal Mansour in Marrakech);
(b) the linkage of the Le Meridien brand to the Royal Mansour brand which diluted the identity of the latter in that it suffered from the standardisation of "French-inspired standard of European style comfort spread out over 120 units across the world" by the Le Méridien group of French origin to the detriment of the Royal Mansour brand as a symbol of 100% Moroccan-inspired luxury with a strong cultural and visual Moroccan identity through only two distinctive establishments in Marrakech and Casablanca;
(c) the closure of the Hotel for two years during renovation and as a consequence (i) the ongoing weakening of the renown of the brand directly in relation to the Casablanca luxury hotel industry and indirectly in relation to the Marrakech one, and (ii) a negative differentiation of the brand with regard to the new competition and the necessity, upon reopening of the Hotel "to regain ground to simply hope to recapture market shares vis-à-vis new competitors already in cruising speed."129
(i) damages in the amount of MAD 96,353,371 being the loss of revenue since 2005 up to the Date of Termination as a result of the Hotel being maintained and operated at a standard less than an international five-star standard;
(ii) damages in the amount of MAD 372,382,996 being the costs of returning the Hotel to an international five-star standard;
(iii) damages in the amount of MAD 80,876,398 being the loss of the value of the Hotel’s brand as a result of the maintenance and operation of the Hotel as a standard less than an international five-star standard;
- Part A Costs incurred prior to the filling of the Request 4,982.40
- Part B Costs incurred following the filling of the Request and in advance of the preparation of the Answer 31,516.42
- Part C Costs incurred preparing the Answer filed by the Second Respondent and reviewing the Answer filed by the First Respondent 39,575.50
- Part D Costs incurred following the filing of the Answer 67,690.46
- Part E Costs incurred preparing English Court Proceedings 49,470.00
- Part F Costs incurred from and including 8th May 2014 21,740.60
- Part G Costs incurred from and including 27th June 2014 15,044.80
- Part H Costs incurred from and including 24th July 2014 39,295.10
1 Gibson Dunn & Crutcher LLP’s Fees and Costs GBP 622,520.50
2 Landwell & Associés’Fees from May 2013 to January 2015 EUR 325,500.00
3 Rajah & Tann LLP’s Fees for services from June 2013 to July 2014 SGD 658,326.60
- Ian Winter QC from July 2013 to April 2014 GBP 70,100.00
- George Bompas QC (November 2013) SGD 21,294.59
- George Hayman from October 2013 to July 2014 SGD 92,735.00
5 Other expenses:
- Moroccan Counsel (Kettani) MAD 177,775.00
- Expert Report and Testimony on Moroccan law (Hajji & Associés) MAD 251,086.00
- Expert Report and Testimony on condition of the Hotel (Mace) EUR 47,974.15
- Expert Report and testimony on valuation issues (Abergel & Associés) EUR 278,833.50
- Translation services (Transperfect) GBP 8,355.20
- Interpretation and transcription service (Merrill) GBP 5,783.75
(a) DECLARES that all of CGHA’s claims against Travelodge in this Arbitration have been discontinued as of 4 February 2014;
(b) HAS JURISDICTION over Travelodge’s claim for costs against CGHA;
(c) DECLARES that Woodman Maroc has breached the Management Agreement in that:
(i) it breached its payment obligations under Article 5 of the Management Agreement from 31 December 2012 up to 8 January 2014;
(ii) it breached its obligations under the Management Agreement to maintain the interior of the Hotel, the Fixed Plant and FF&E and, to operate the Hotel, to the standard of a five-star international hotel; and
(iii) it breached its obligation to perform the Management Agreement in good faith;
(d) DECLARES that the Management Agreement was terminated on 8 January 2013;
(e) ORDERS that Woodman Maroc, pay to CGHA damages in the amount of MAD 549,612,765;
(f) ORDERS that Woodman Maroc pay to CGHA USD 669,750 as fees and expenses of the arbitrators and the ICC administrative expenses, and GBP 706,759.45, SGD 219,442.20, EUR 326,807.65 and MAD 251,086 as legal and other costs incurred for the Arbitration,
(g) ORDERS that Woodman Maroc pay simple interest at a rate of 6% per annum on all amounts awarded that remain unpaid 21 days after the date of this Final Award to the date of payment;
(h) ORDERS that CGHA pay to Travelodge GBP 161,147.16 as legal costs plus simple interest at a rate of 8% per annum on any amount that remains unpaid 21 days after the date of this Final Award until the date of payment; and
(i) REJECTS all other claims of the Parties.
Place of arbitration: London (United Kingdom)