Hilton International Manage (Maldives) Pvt Ltd v Sun Travels & Tours Pvt Ltd

[3] I found Sun Travels and Siyam to be in contempt of court and imposed a fine of $100,000 against Sun Travels and an imprisonment term of one year against Siyam. However, I suspended the imprisonment term against Siyam for three months. If the amounts due under the Judgment were paid in full within the three-month period, the imprisonment term against Siyam was to be substituted with a fine of $100,000; otherwise, Siyam was to commence serving his term of imprisonment.

[4] Siyam was subsequently granted extensions of time with a final extension to 20 March 2024. The amounts due under the Judgment were paid in full before 20 March 2024 and the imprisonment term imposed on Siyam was thus substituted with a fine of $100,000, which was paid.

[5] Sun Travels, a company incorporated in the Maldives, was a resort operator that owned the Iru Fushi Beach & Spa Resort in the Maldives in Medhafushi, Noonu Atoll (“the Resort”). Hilton was a company incorporated in the Maldives, which was affiliated with a large hospitality company operating hotels and resorts worldwide. Sun Travels and Hilton were parties to a hotel management agreement under which Sun Travels agreed to let Hilton manage the Resort. This agreement was eventually terminated by Sun Travels.

[6] In 2013, Hilton commenced arbitration proceedings pursuant to an arbitration clause in the hotel management agreement. Hilton claimed that the termination was a wrongful repudiation of the agreement. The Singapore-seated arbitral tribunal (the “Tribunal”) issued the Awards in 2015. Under the Awards, Sun Travels had to pay Hilton US$599,095.66 (pre-termination claims), £1,051,230.10 (legal and expert’s fees and expenses), US$20,945,000 (damages), interest and fees and expenses in respect of the arbitration proceedings. Sun Travels did not pay the amounts in the Awards.

[7] In December 2015, Hilton commenced enforcement proceedings in the Maldives Civil Court. Sun Travels resisted the enforcement proceedings. On 28 September 2016, the division of the Maldives Civil Court that heard Hilton’s enforcement application ruled that the enforcement proceedings were beyond its jurisdiction and that the Awards had to be enforced by the Judgment Enforcement Division of the Civil Court.

[8] Hilton transferred the enforcement proceedings to the Judgment Enforcement Division of the Maldives Civil Court. On 29 November 2016, the Judgment Enforcement Division of the Maldives Civil Court ruled that the enforcement proceedings could not proceed until the Maldives High Court had decided on the enforcement of the Awards.

[9] Hilton appealed to the Maldives High Court. On 20 April 2017, the Maldives High Court upheld Hilton’s appeal and overruled the decision of the Judgment Enforcement Division of the Maldives Civil Court. The Maldives High Court held that the Civil Court had jurisdiction to enforce the Awards.

[10] Hilton then re-commenced enforcement proceedings in the Maldives Civil Court (the “Second Maldivian Enforcement Proceedings”). Again, Sun Travels resisted Hilton’s enforcement application.

[12] On 22 June 2017, the Maldives Civil Court that was handling the Second Maldivian Enforcement Proceedings noted the decision in Sun Travels’ Civil Claim and the pending appeal and ruled that Hilton’s application in the Second Maldivian Enforcement Proceedings could not be “entertained ... for the time being”.

[13] In July 2020, Hilton succeeded in its appeal against the Maldives Civil Court’s decision on Sun Travels’ Civil Claim. The Maldives High Court reversed the Civil Court’s decision. Sun Travels’ appeal against the Maldives High Court’s decision was dismissed by the Maldives Supreme Court in August 2021.

[15] In November 2020, the Maldives Civil Court dismissed Sun Travels’ objections to the enforceability of the Awards. In March 2021, the Maldives High Court dismissed Sun Travels’ appeal against the Maldives Civil Court’s decision. In August 2021, the Maldives Supreme Court dismissed Sun Travels’ appeal against the Maldives High Court’s decision.

[17] In July 2017, Hilton commenced HC/OS 845/2017 (“OS 845”) for injunctive and declaratory relief in response to Sun Travels’ Civil Claim. The Singapore High Court:

(a) granted an injunction restraining Sun Travels from taking any steps in reliance on the Maldives Civil Court’s decision on Sun Travels’ Civil Claim; and

(b) declared that (i) the Awards are final, valid and binding on the parties; and (ii) Sun’s claim against Hilton in respect of disputes that had arisen out of or in connection with the hotel management agreement and any consequential proceedings (including appeals) would be in breach of the arbitration agreement contained in the hotel management agreement.

See Hilton International Manage (Maldives) Pvt Ltd v Sun Travels & Tours Pvt Ltd [2018] SGHC 56.

[18] Sun Travels appealed against the High Court’s decision in OS 845. The Court of Appeal set aside the injunction but upheld the declarations: Sun Travels & Tours Pvt Ltd v Hilton International Manage (Maldives) Pvt Ltd [2019] 1 SLR 732.

[22] On 7 July 2023, Sun Travels filed HC/SUM 2027/2023 (“SUM 2027”) in which it applied for leave to adduce additional evidence for the hearing in SUM 3513. As Hilton consented to SUM 2027, Sun Travels was granted leave to adduce the additional evidence.

[23] Section 4(1)(a) of the AJPA states:

The standard of proof for establishing contempt of court is that of beyond reasonable doubt: s 28 of the AJPA.

[27] Section 6(2) of the AJPA states:

[28] It was not disputed that Siyam, as the Chairman and Managing Director of Sun Travels, was an officer of Sun Travels.

[31] The issues before me were:

[39] I agreed with Hilton that Sun Travels had the means to pay the Judgment Debt but chose not to do so. Based on Sun Travels’ financial statements for 2021 (“2021 FS”), its net asset position was US$25,350,880 as of 31 December 2021. This figure was based on the Resort and the leasehold interest in the land on which the Resort was situated being valued at its book value of around US$76m. Hilton submitted that the property was worth substantially more than that. Hilton’s expert’s valuation report (the “HVS Report”) valued the property at US$202m as of 1 January 2022.

[40] Sun Travels challenged the HVS Report but did not itself adduce any valuation report. Sun Travels argued that (a) the HVS Report was prepared on a “desktop” basis (ie, without conducting an inspection of the Resort either physically or virtually) and based on information and documents provided by Hilton, (b) the projection of the Resort’s gross operating profit in the HVS Report was unrealistic and unduly optimistic, and (c) Hilton’s expert had carried out a valuation in 2017 at Sun Travels’ request and valued the property at US$153m and the value of the property would have reduced as the remaining duration on the lease became shorter.

[41] I was mindful that although Sun Travels had not produced any valuation report, the HVS Report was not to be accepted unquestioningly. Nevertheless, in my view, Sun Travels had not shown sufficient reason (apart from its own views) to reject the HVS Report. Sun Travels did not adduce any expert evidence to challenge the projections of gross operating profits in the HVS Report. As for the fact that the property was valued at US$153m in 2017, that did not necessarily mean that the valuation of US$202m (as of 1 January 2022) was therefore incorrect. The remaining duration of the lease was but one factor in the valuation. There was no reason to think that the expert was not aware of the earlier valuation that the same expert had done in 2017; both valuation reports were signed off by the same managing partner. In any event, it was clear that the value of the property was substantially more than its book value.

[45] In addition, I agreed with Hilton that the evidence showed that Sun Travels had consistently shown no intention of satisfying the Judgment Debt.

(a) Sun Travels had consistently resisted Hilton’s attempts to enforce the Awards in the Maldives and in Singapore.

(c) Sun Travels attempted (by way of the Sun Travels’ Civil Claim) to relitigate matters that had been resolved by the Awards.

(e) Sun Travels’ Chief Financial Officer stated on affidavit that even if Sun Travels had surplus from its revenue, it could not deploy all of it to satisfy the Judgment Debt and would have had to use the same to keep the business operations running. Sun Travels had net profits after tax of around US$4.1m in 2021; instead of making partial payment to Hilton, Sun Travels chose instead to apply the profits to other purposes including the upkeep and maintenance of the Resort and its working capital.

[47] As stated earlier, it was undisputed that Siyam was an officer of Sun Travels and thus, he satisfied s 6(2)(a) of the AJPA.

[48] Under s 6(2)(b) of the AJPA, Siyam was guilty of the same contempt of court as Sun Travels if he:

(a) consented or connived, or conspired with others, to effect the commission of the contempt of court;

(b) was in any other way, whether by act or omission, knowingly concerned in, or was party to, the commission of the contempt of court by the corporation; or

(c) knew or ought reasonably to have known that the contempt of court by Sun Travels would be or was being committed and failed to take all reasonable steps to prevent or stop the commission of that contempt of court.

[49] In my view, Siyam’s submission that he was not the alter ego of Sun Travels was irrelevant. He was guilty of the same contempt of court as Sun Travels if his conduct satisfied any of the limbs in s 6(2)(b) of the AJPA. Section 6(2) of the AJPA did not require proof that Siyam was the alter ego of Sun Travels.

[51] I therefore found Siyam guilty of the same contempt of court as Sun Travels.

[52] The punishment for contempt of court in this case was a fine not exceeding $100,000 or imprisonment for a term not exceeding three years or both: s 12(1)(a) of the AJPA.

[53] In Mok Kah Hong, the Court of Appeal held (at [103]) that in most cases involving continuing breaches, the sentence imposed would include both punitive and coercive elements, whereas in cases involving one-off breaches, the coercive element was not likely to feature at all and the overriding sentencing principle was one of punishment.

(a) whether the claimant has been prejudiced by virtue of the contempt and whether the prejudice is capable of remedy;

(b) the extent to which the contemnor has acted under pressure;

(d) the degree of culpability;

(f) whether the contemnor appreciates the seriousness of the deliberate breach; and

(g) whether the contemnor has co-operated.

I agreed with Hilton that these factors remain applicable to sentencing for contempt of court under the AJPA although Mok Kah Hong was decided before the AJPA was enacted.

[56] I rejected Sun Travels’ and Siyam’s submissions that a fine of $25,000 would suffice. In my view, that was wholly inadequate given the facts. Sun Travels’ and Siyam’s conduct was egregious. I agreed with Hilton that the maximum fine of $100,000 should be imposed on Sun Travels.

[57] As for Siyam, I agreed with Hilton that a sentence of one year’s imprisonment should be imposed on Siyam. Given the facts of this case, a fine alone was not an adequate deterrent. However, taking into consideration the coercive element (see [53] above), I suspended the sentence of imprisonment for three months for Siyam to remedy the situation and procure payment to Hilton of the amounts due under the Judgment. If payment was made, the imprisonment term would be substituted with a fine of $100,000.

[59] At the subsequent hearing on 21 July 2023, it was clarified that Siyam was an incumbent Member of Parliament in the Maldives and one of the five longest-serving Members of Parliament who may assume the role of Speaker of Parliament in the official Speaker’s absence. He was also the Honorary Consul of Romania and the Head of the Consulate of Romania in the Maldives as well as the Honorary Consul of the Republic of Korea in the Maldives. However, it was not disputed that he did not enjoy diplomatic immunity under the Vienna Convention on Diplomatic Relations (“VCDR”), the relevant provisions of which are in force in Singapore pursuant to s 3 of the Diplomatic and Consular Relations Act 2005 (2020 Rev Ed), for the following reasons:

(a) he was not a diplomatic agent (as defined in Art 1 of the VCDR) of the Maldives in Singapore as he was not the head or a member of the diplomatic staff of the mission of the Maldives in Singapore; and

(b) he was not a diplomatic agent of the Maldives in any other State, and in any event, in such a capacity, diplomatic immunity applied only if he was in Singapore while proceeding to take up or to return to his post, or when returning to his own country, which he was not (Art 40(1) of the VCDR).

[60] As Siyam did not enjoy diplomatic immunity, I imposed the same sentence (see [57] above) on him. However, I decided that it was unnecessary for me to require him to surrender his passport. In my view, the high offices held by Siyam was sufficient reason (in the absence of evidence suggesting otherwise) to believe that he would return to Singapore to serve his sentence of imprisonment if he failed to procure payment of the Judgment Debt to Hilton.

[61] The three-month period for Siyam to procure payment of the amounts due under the Judgment to Hilton was due to expire on 21 October 2023. On 19 October 2023, Sun Travels and Siyam applied for an extension of time until 21 April 2024. I heard the application on 27 October 2023. Siyam argued that despite his best efforts, Siyam was unable to raise the funds for Sun Travels to pay Hilton. I rejected Siyam’s argument. Siyam’s or Sun Travels’ ability to make payment was irrelevant at this stage of the proceedings. Both Siyam and Sun Travels had been found guilty of contempt of court and were sentenced accordingly. Siyam was sentenced to an imprisonment term of one year. That sentence was suspended to give him an opportunity to procure payment to be made to Hilton and thereby avoid having to serve the imprisonment term. If he could not procure payment to be made, then he would have to serve the imprisonment term. The reason for his inability to procure payment to be made was irrelevant. However, as Hilton had no objections to an extension of one month, I granted an extension of time until 27 November 2023.

[62] On 26 November 2023, Sun Travels made partial payment of US$5m to Hilton. On 27 November 2023, Sun Travels and Siyam again sought an extension of time until April 2024. Hilton agreed to an extension until the end of January 2024 if Sun Travels made a further payment of US$5m by 15 December 2023. I therefore granted an extension of time until 26 December 2023 and if payment of another US$5m was made by then, a further extension would be granted until 31 January 2024.

[63] Sun Travels paid US$4m on 25 February 2024, and Sun Travels and Siyam sought a final extension until 20 March 2024. As Sun Travels was making efforts to pay Hilton, I granted Siyam a final extension until 20 March 2024. By the end of 18 March 2024, Sun Travels paid Hilton the balance outstanding on the Judgment. Accordingly, the sentence of imprisonment against Siyam was substituted with a fine of $100,000, which Siyam paid.

[65] Section 22 of the International Arbitration Act 1994 (Cap 143A, 2002 Rev Ed) (“IAA”) provides that “proceedings under this Act” are to be heard otherwise than in open court.

[66] Sun Travels and Siyam submitted that the present proceedings touched on arbitral awards and therefore ought to be treated as being heard in private. Hilton objected. I agreed with Hilton that there was no reason for the committal proceedings to be heard in private in this case. The committal proceedings were not proceedings under the IAA. In any event, the Awards were already in the public domain as a result of two judgments by the High Court and two by the Court of Appeal (see [17]–[19] above).

(a) Sun Travels and Siyam were to pay Hilton:

(i) costs fixed at $5,000 in connection with Hilton’s application for leave to commence committal proceedings,

(ii) costs fixed at $5,000 in connection with their application for leave to adduce further evidence,

(iii) costs fixed at $16,000 in connection with the committal proceedings, and

(iv) costs fixed at $6,000 in connection with their application for extension of time,

with disbursements to be fixed by me, if not agreed.

(b) Each party was to bear its own costs in respect of the hearing on 21 July 2023 on the issue of the ramifications of the fact that Siyam held a diplomatic passport.