DENPASAR – Indonesian owners of the Ritz-Carlton Bali Resort & Spa were awarded US$10 million in damages by a Maryland Federal (U.S.) jury who found the that Marriott International, who own the Ritz-Carlton brand, had violated a non-competition exclusivity agreement by participating in the development of a second hotel in Bali, the Bulgari Resort.
In an April 28 ruling reported by Bali Update (www.balidiscovery.com) the judges ruled on a number of post-trial motions filed on behalf of the Indonesian owners:
• The Court denied “Marriott’s motion in all respects,” except as regards issuing a final ruling on Marriott’s assertion that the punitive damage award of US$10 million was excessive.
• The Court granted the Indonesian owner’s request for declaratory relief which opens the way for owners Karang Mas Sejahtera (KMS) to, at its option, terminate its relationship with Ritz-Carlton.
• The Court denied KMS’ request for “disgorgement and forfeiture” of fees paid by them to Ritz-Carlton.
In rejecting the request for a refund of management fees paid to Ritz-Carlton by KMS, the Court nonetheless did declare that the Indonesian owners are entitled to end the operating agreement with Marriott/Ritz-Carlton.
It should be noted, said Bali Update, that it is both unclear and uncertain if KMS’ intention is to exercise its right to end its relationship with Ritz-Carlton.
A further hearing in the case will adjudicate whether or not a February jury award of US$382,304 in compensatory damages will be sufficient to meet the attorney fees incurred by KMS in bringing the matter before the U.S. Courts.
Marriott is expected to appeal the case.
