COLOMBO (News 1^st) – It has now come to light that the Grand Hyatt Hotel Project in Colombo, which allegedly involved financial frauds amounting to billions of public funds during the Mahinda Rajapaksa administration is facing another issue following an order delivered against it at an arbitration tribunal in Singapore.

Italian contractor Interna Contract Spa, who was awarded the interior package 2 of the Grand Hyatt Project by the previous management, filed an arbitration in Singapore against Sino Lanka Hotels and Spa which is a subsidiary of Canwill Holdings (Pvt) Ltd for unlawfully terminating the contract they had entered into on January 7, 2015- the day before the change of Government.

The formal award was delivered by the arbitration tribunal on October 6, 2017, against Sino Lanka Hotels and Spa. The order was to pay a staggering 7,432,062.72 Euros to Interna for the ‘unlawful’ termination of the contract.

Sino Lanka filed an appeal in November 2017 against the arbitration award at High Court of Singapore. Meanwhile, Interna filed an application at the Colombo High Court requesting to enforce the arbitral award in their favor.

Although the tender and contract documents show that the place of arbitration shall be in Colombo, the reason for the contractor to file arbitration in Singapore was based on the Letter of Acceptance issued on December 22, 2014.

According to clause 9 of the Letter of Acceptance (LoA), all disputes arising out of or in connection with the contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said rules and the arbitration venue shall be in Singapore and arbitration proceedings shall be in English.

According to information that has been revealed the former Board of Directors of Sino Lanka Hotels and Spa- Gamini Senarath, Piyadasa Kudabalage and several others, selected prospective contractors based on the evaluations carried out by the Quantity Supervisors without following Government procurement guidelines.