The Antonio B. Won Pat International Airport Authority (GIAA) has lodged a notice of appeal with the Guam Supreme Court after the Guam Superior Court upheld an earlier arbitration award to DFS Group.

A statement issued by GIAA earlier this week confirming the appeal is the latest in a long-running legal dispute between the parties linked variously to the award of a 10-year concession to Lotte Guam in 2013.

This particular appeal centres on GIAA’s claims that DFS owes approximately $2.1m in back rent and damages for a section of the retail space that the retailer occupied before Lotte Duty Free took the concession over in 2013.

GIAA states it drew down the amount on a letter of credit it says DFS provided as a security bond for all its leases under the airport concession when the retailer refused to pay holdover rent.

SUPREME COURT TO RULE

DFS Guam L.P. contested and won the arbitration case in 2016, with the Guam Superior Court ruling in the retailer’s favour for a breach of its concession agreement and ordered GIAA to return $1.8m in ‘seized’ funds. This was addressed in the context of an apparent ‘retaliation’ when DFS contested what it says was the ‘improper’ award of the airport concession to Lotte.

GIAA was also ordered to pay interest on DFS’ money at a 6% per annum at the time, with the total including penalties amounting to $2.5m.

According to various local media outlets, including Pacific Daily News and The Guam Daily Post, DFS is reported to have issued a statement prior to the airport filing its notice of appeal this week in which it claims the arbitration amount now totals more than $2.9m including interest.

However, this alleged ‘statement’ was not immediately available and DFS had not responded to TRBusiness’ request for clarity on the figure and further comment at the time this report went to press.

Lotte Duty Free won the 10-year duty free concession at Guam A.B. Won Pat International Airport in 2013.

Genevieve Rapadas, Counsel for GIAA said: “The issue DFS is trying to avoid is the clear language of the lease which provides that DFS owes the holdover rent claimed by GIAA. DFS and GIAA explicitly agreed in the relevant lease that all disputes, including the holdover rent dispute, were to be decided by the Guam Superior Court.

“DFS through the arbitration over GIAA’s draw down on a letter of credit provided by DFS as security, is trying to side step a determination on the merits of the holdover rent issue by the Guam Superior Court.

“It’s GIAA’s position that this dispute, which is part of the ongoing litigation with DFS, never should have gone to arbitration in the first place and we are looking forward to the Supreme Court’s review.”

GIAA adds that it ‘stand behind’ the 2012-2013 procurement, which it says has yielded the best contract in its history.