Dispute between Dubai’s Five Holdings, Viceroy heats up over Palm Jumeirah hotel

The dispute between Dubai developer Five Holdings and global hotel operator Viceroy over a hotel in Palm Jumeirah continues to deepen as both parties refuse to back down.

The disputed hotel, which officially opened on March 31, 2017, is owned by Five Holdings and was operated by the Viceroy Group (and named Viceroy Palm Jumeirah).

On June 19, Five Holdings – previously called SKAI Holdings, announced the purported takeover of the hotel by Five Hotels and Resorts – an affiliated company – and said the hotel’s name had been rebranded into Five Palm Jumeirah Dubai.

However, on June 25, global hotel operator Viceroy claimed that the existing hotel management agreement had been “breached”. The company said it had signed a long-term hotel management agreement to operate the Palm Jumeirah hotel in 2013.

Viceroy approached DIFC Courts and stated that a court order had been issued, prohibiting Five Holdings from taking any further actions to prevent Viceroy from exercising its exclusive authority to manage and operate the hotel.

But on Sunday, July 2, Five Holdings issued another statement saying that its hotels unit “continues to manage the Five Palm Jumeirah Dubai hotel and residences”. It said that Viceroy’s agreement to manage the hotel had been “suspended”.

The statement also said: “Pursuant to the decree and the reference to the Dubai Joint Judicial Committee, all proceedings between ASSAS OpCo Limited and VIH Dubai Palm Jumeirah (Cayman Islands), the property’s former operator, have been suspended by force of law.”

In response, Viceroy again confirmed that the injunction issued by the DIFC Courts on June 22 “remains in place”.

“That order prohibits the owner of the Viceroy Palm Jumeirah Dubai hotel from taking any steps to prevent Viceroy from exercising its exclusive authority to manage the hotel, and orders the reinstatement of Viceroy,” it said.

Viceroy alleged that Five Holdings’ chairman and CEO Kabir Mulchandani has “refused to either acknowledge the orders of the DIFC Courts or allow Viceroy entry”.

Bill Walshe, CEO of Viceroy Hotel Group, 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, which were issued on June 22 and remain in place.

“Such actions threaten the entire business community in Dubai. Not only are Five and its affiliates creating confusion amongst colleagues, guests, residents and investors, they are also defying the authority of the DIFC Courts.

“We call on Five and its affiliates to act in the best interest of all of the hotel’s stakeholders and to allow Viceroy immediate access to the hotel property in order to resume its role as the rightful manager of the Viceroy Palm Jumeirah Dubai.”

Meanwhile, on Monday morning (July 3), Five Holdings issued a further statement clarifying its stand.

“The Dubai Joint Judicial Committee, a judicial body to resolve disputes between Dubai and DIFC Courts, has decided to suspend the matter pending before DIFC Courts and Dubai Courts until it decides which is the relevant court,” it said.

“This was confirmed by the Dubai Joint Judicial Committee on June 29, 2017 and further ratified by a letter issued on July 2, 2017. Viceroy is referring to an order dated June 22 2017, which has been suspended by force of law.

“Our hotel has been licensed by DTCM as a Five Hotel, a copy of which remains in our hotel lobby,” the statement added.