Arbitrator Israel Leshem today ruled that Alrov (Israel) Ltd. (TASE: ALRO), controlled by chairman Alfred Akirov, must pay Hilton Hotels $13 million plus interest, for illegally abrogated its management agreement for the David Citadel Hotel in Jerusalem.
In May 2001, Alrov subsidiary Alrov Properties and Lodgings Ltd. (TASE: ALRPR) cancelled the management agreement for the hotel, then called the Jerusalem Hilton, on the grounds that Hilton was in breach of the agreement.
The hotel is across the street from Akirov's Mamilla project next to the Old City of Jerusalem.
Leshem ruled that Alrov must pay Hilton Hotels $13 million, plus interest at LIBOR +2% from January 2007, and interest from the date the agreement was cancelled on payments owed to Hilton. Alrov must also pay $1.25 million in arbitration costs.
Alrov said that will report a $13 million loss, or NIS 43 million after tax considerations, on the arbitration charge.
Published by Globes [online], Israel business news - www.globes-online.com - on January 1, 2009
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