DFS Guam prevails on all claims against GIAA

BARRIGADA AND TAMUNING, Guam—DFS Guam LP announced yesterday that it prevailed across the board on all claims against the Guam International Airport Authority for GIAA’s taking of over $1.8 million dollars of DFS’ money.

The arbitration, which occurred on Guam, arose from GIAA’s breach of the Main Concession Agreement, one of the contracts that governed DFS’ duty free operations at the airport and addressed GIAA’s seizure of the funds done in apparent retaliation for DFS contesting GIAA’s improper award of the airport concession contract to Lotte Duty Free Guam LLC. The arbitrators’ decision represents a clear victory for DFS and a significant defeat for GIAA.

The award by the three highly qualified arbitrators picked jointly by both GIAA and DFS was both succinct and definitive, unanimously stating that “GIAA breached Section 12.3.1 of the Main Agreement and damaged DFS by drawing down a portion of the Faithful Performance Bond in spite of the fact that no breach by DFS of the Main Agreement was alleged by GIAA.” The arbitration panel ordered GIAA to return the $1.8 million it seized from DFS. In addition, GIAA was ordered to pay interest on DFS’ money at 6 percent per annum, running from Dec. 5, 2013, until the amount is paid in full—this currently amounts to over $270,000 in interest payable by GIAA to DFS. The arbitration panel also ordered GIAA to pay all of DFS’ legal fees of over $380,000 and the full cost of the arbitration fees, costs, and expenses of over $150,000. GIAA must also pay interest on DFS’ attorneys’ fees and expenses, running from the date of the decision until the amount is paid in full. Because GIAA has not yet paid the amount, the final amount that will be owed by GIAA is not yet determined, but the amount will be no less than $2.5 million payable to DFS. In addition to the payments GIAA must make to DFS, GIAA has additionally incurred legal expenses of over $400,000 to its own lawyers, the law firm of Calvo Fisher & Jacob, during the arbitration.

Critically, GIAA’s seizure of DFS’ money is part of a broader campaign waged by GIAA and its lawyers to intimidate DFS in its effort to seek redress for the improper award of GIAA’s duty free concession contract to Lotte Duty Free Guam. Several lawsuits arising from this misconduct remain pending before Judge Barcinas in Guam Superior Court.

DFS’ victory in the arbitration case is only part of a legal process that has now stretched nearly three years, by which DFS seeks substantive redress for the various violations of law and the bid process committed by GIAA that resulted in Lotte Duty Free Guam wrongfully obtaining the duty free concession contract at the Guam International Airport.

In its currently pending lawsuits, DFS asks the Superior Court to find that GIAA violated various provisions of Guam law and bid rules that rendered Lotte an unqualified bidder that submitted a nonresponsive bid. DFS also requests that the court find the concession contract invalid from the time that the GIAA and Lotte signed it. DFS alleges that the GIAA violated the mandatory stay provision, which if had been followed, would have afforded DFS the ability to defend its rights by prohibiting the award of the contract until DFS’ protest had been resolved. DFS seeks both injunctive relief and monetary damages.

DFS also asks the court to order a new RFP process to be supervised by an independent monitor appointed by the court.

“DFS remains undeterred and unintimidated by the many tactics employed by GIAA and its lawyers to delay justice for the wrongs detailed in the lawsuits pending before Judge Barcinas,” stated Maurice M. Suh, one of the attorneys for DFS. DFS has consistently stated that it is pursuing its case to bring to light the corrupt activities that resulted in the award of the concession contract to Lotte and for the benefit of the public contracting process in Guam. DFS supports the integrity of the law to keep Guam a place where companies and businesses want to invest, and to hold the GIAA and Lotte to the standards of conduct that Guam deserves.