Guam Airport Asks AG To Ask Court To Set Aside $1.8 Million Arbitration Award

DFS awarded money after a rival duty free company won contract

By Gaynor Dumat-ol Daleno

HAGÅTÑA, Guam (Pacific Daily News, June 29, 2016) – Guam’s airport agency is asking the attorney general to step in and ask a local court to set aside an arbitration award against the agency.

At issue is a $1.8 million surety bond, or security deposit, that former airport duty-free concessionaire DFS had arranged with a bank as part of its lease of space at the airport terminal.

The Airport withdrew that money from Citibank in 2013 after the agency awarded the new duty-free concessionaire contract to Lotte Duty Free, stating it was for DFS' alleged unpaid rent.

"The arbitrators heard evidence from both parties, and concluded that GIAA had indeed violated the main concession agreement when it improperly took the security deposit that DFS had posted for the main concession lease," according to a DFS response.

The arbitration panel held hearings earlier this year and decided the airport agency should repay DFS’ $1.8 million deposit because DFS didn’t violate the terms of its main lease agreement with the airport.

The tribunal also awarded DFS more than $442,000 for the legal fees and related costs of the arbitration to recover the $1.8 million, plus 6-percent annual interest on the $1.8 million.

The Airport, in asking Attorney General Elizabeth Barrett-Anderson to get involved, stated that “in effect, the off-island arbitrators who decided the case usurped the power of our local court.”

The arbitration was administered by the International Centre for Dispute Resolution of the American Arbitration Association.

DFS stated "the three highly qualified and experienced arbitrators were jointly selected by GIAA and DFS."

The airport agency stated the current duty-free concession contract with Lotte “has been of huge benefit to the airport and the people of Guam.”

The legal issues stemming from DFS’ challenges of the award of the duty-free concession contract to Lotte have been costly to the A.B. Won Pat Guam International Airport Authority, the agency stated. The Airport added it has received reimbursements from Lotte for certain legal expenses.

The airport is represented by Calvo Fisher and Jacob, a law firm that stands on the opposite side of another recent, unrelated arbitration award involving the Port Authority of Guam.

In the recent Port arbitration award, the law firm representing Guam YTK is asking the Superior Court to approve the $14 million arbitration award in favor of the fisheries company whose lease had been terminated by the Port for non-payment of rent.

"It is ironic that Calvo Fisher & Jacob LLP,  the law firm GIAA is using to challenge the DFS arbitration award, is the same law firm that is defending the nearly $14 million arbitration award against the Port Authority of Guam in the YTK case," according to DFS.

Pacific Daily News
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