LA court throws out Dubai-based Five Holdings case against Viceroy Hotel Group

LA court throws out Dubai-based Five Holdings case against Viceroy Hotel Group
Published: 14 March 2018 - 2:28 a.m.
By: Sarakshi Rai

The Los Angeles Superior Court has thrown out all claims made against Viceroy and two of its senior leaders in a lawsuit brought by Dubai-based Five Holding, according to the Viceroy Hotel Group.

According to the Viceroy Hotel Group statement, "The Judge decided to dismiss the lawsuit... Viceroy will seek recovery of its attorney’s fees as a result of the dismissal of the lawsuit, and will continue to pursue its claims for fraud, extortion, conversion and unfair business practices against Five Holdings and affiliated companies in the Los Angeles Superior Court."

In 2013, Viceroy, through its affiliates, entered into a 30-year agreement with Kabir Mulchandani to manage a luxury hotel on the Palm Jumeirah Island in Dubai. Two months after the Viceroy Palm Jumeirah Dubai opened, Kabir Mulchandani’s Five Holdings installed their own management company, which seized control of the hotel’s operations.

On June 19, Five dramatically seized back control of the hotel, terminating the contract with Viceroy and changing all of the hotel signs overnight from the Viceroy Palm Jumeirah Dubai to Five Palm Jumeirah Dubai. On June 22, 2017, Viceroy secured a preliminary injunction from the Dubai International Financial Centre (DIFC) Court ordering the reinstatement of Viceroy as the manager of the hotel. 

On September 7, Five Holdings and affiliated parties filed a lawsuit against Viceroy in Los Angeles alleging multiple counts of financial fraud and mismanagement against the hotel group. The lawsuit claims operation of the $1bn hotel by Viceroy has been a series of errors since its opening in March.

Viceroy’s cross-complaint detailed Mulchandani’s decision to leverage Viceroy’s management expertise in opening the hotel, which he followed by evicting Viceroy from its role as exclusive hotel manager, Viceroy’s statement said.

"We are pleased that the Los Angeles Superior Court held that this lawsuit has absolutely no merit," a spokesman for Viceroy said. “In Dubai, we intend to continue to take all steps necessary to ensure the DIFC Court’s injunction is finally implemented, and we are confident that with the assistance of the local authorities in Dubai, Viceroy will ultimately be reinstated as the manager of the Viceroy Palm Jumeirah Dubai.”

HoterlierMiddleEast.com has reached out to Five for a comment.

Five Palm Jumeirah was recently named by Luxury Travel Intelligence (LTI), a members-only resource for affluent globetrotters, as one of the worst ranked hotel openings of 2017

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