International Arbitration Award for Hotel Management Company Involving Hotel Property in Mexico

On December 23, 2004, a panel of arbitrators awarded Allure Resorts Management, LLC over $2.1 million for lost profits in a dispute over the wrongful termination of a management services agreement for a luxury resort hotel in Mexico. Allure was represented by Alan Loewinsohn, Steve Wagner, and a team from the firm’s Dallas office.

Allure is a Delaware company in the hotel management business. The hotel property at issue in the dispute is located on the Mayan Riviera in Tulum, Mexico.

The arbitration award was against Sole Resort S.A. de C.V., the owner of the Mexico hotel. Sole is a company based in Italy and Mexico.

The arbitration was conducted under the authority of the International Centre for Dispute Resoltion and was held in Miami, Florida.

Allure contended that Sole breached the management contract when it terminated Allure as manager of the hotel in August 2003. Allure filed its demand for arbitration, pursuant to the terms of the contract, in November 2003. The arbitration hearing was held in November 2004.

In response to Allure’s claims for breach of contract , Sole had contended that Allure did not use commercially reasonable efforts to manage the hotel, misrepresented several material facts, including Allure’s preferred supplier relationship with a major tour operator, the Mark Travel Group, and that Allure suffered no damages. Sole further sought damages against Allure by way of a counterclaim.

The panel ruled that Sole breached the contract and owed damages to Allure. The panel denied all relief requested by Sole.