Travel retailer DFS has renewed its legal battle against the award of an airport duty free concession to South Korean rival Lotte Duty Free, which has already started trading at Guam’s AB Won Pat International Airport.

 

Yesterday DFS Guam LP, the local subsidiary of the Hong Kong-based global DF&TR player, filed a bid protest appeal before Guam’s Office of Public Accountability (OPA) setting forth numerous bases for overturning the award made to Lotte Duty Free Guam by the Guam International Airport Authority’s (GIAA).

 

The OPA appeal is the latest salvo in a process that has taken over 17 months. DFS is seeking substantive redress for what it sees – in its own words – as “the violations of law and the bid process that resulted in Lotte Duty Free Guam wrongfully obtaining the duty free concession contract”.

 

In a letter in May 2013 from GIAA’s legal counsel to that of DFS, it states: “There was nothing ‘unlawful’ about the process GIAA used to evaluate the proposals or for the GIAA Board to vote to award the duty free concession to Lotte. The RFP process was neutral, fair, independent and resulted in the award of a contract to the proposal that offers the greatest financial benefits to the Airport and the people of Guam.”

 

AUTOMATIC STAY MOTIONED
As part of its appeal, DFS has also filed a motion with the OPA to enforce the automatic stay of the award of the airport concession to Lotte. Lotte has ploughed $20m into a refurbishment of the airport’s retail facilities over a 12-month period which includes nine luxury boutiques (below).

 

DFS, which held the contract before Lotte (see main image above) is asking the OPA to rule that the stay should have been imposed from the date DFS submitted its initial protest, on 30 October, 2012 until now.

 

DFS wants the OPA to do the following:

– order GIAA to refrain from taking any further action with regard to the RFP

– make the GIAA acknowledge that Lotte has no legal right to occupy the airport concession space

– rule on DFS’s protests No2 and No3, which have been pending for more than a year.

DFS has also filed a response opposing GIAA’s request that the Public Auditor disqualify herself from hearing DFS’s protests. DFS alleges that the Public Auditor was not disqualified under the law and that the reasons GIAA asserted for her disqualification were baseless.

“DFS will not be deterred in its efforts to have the merits of this improper award of the concession contract reviewed,” says Joyce Tang, counsel for DFS. The company insists that it is resolved to continue its efforts to overturn the GIAA award to Lotte through Guam’s judicial bodies.

 

Speaking to TRBusiness yesterday, DFS Group Chairman and CEO, Philippe Schaus said: “It’s all about making sure that this industry remains transparent and that we all respect the rules and the laws. If that doesn’t happen anymore that is not good for the industry.”

 

For further background to this lengthy legal dispute, click here.