Barceló Hotel Chain Welcomes Arbitration

July 4, 2008

MANAGUA – Spanish hotel giant Grupo Barceló welcomed the Ortega administration’s decision to take the hotel chain to international arbitration court over $1.4 million the government alleges it is owed.

“That’s what we want, that (the case) goes to a competent tribunal,” Barceló’s legal representative in Nicaragua, Tomas Delaney, said at a June 26 press conference.

Nicaragua’s Attorney General Hernán Estrada filed a case in the World Bank-affiliated International Center for Settlement of Investment Disputes (ICSID), more than a month after a Nicaraguan judge ordered an embargo against the Spanish company’s Montelimar beach resort on Nicaragua’s central Pacific coast (NT, June 20, 27).

Barceló has said the government had failed to inform the company about the cause of the embargo.

The controversy surrounds Barceló’s occupancy levels since it bought the hotel. The Montelimar complex was built by the first Sandinista government in the 1980s, then sold to the Barceló group for $3 million in 1993.

The Spanish hotel chain agreed to make future payments in accordance with a pay schedule based on occupancy level quotas. Estrada alleges that Barceló hasn’t made all the payments, though he hasn’t made public all of the government’s arguments in the complaint. Barceló says it has paid in full based on audits from PricewaterhouseCoopers and the Nicaraguan Tourism Institute.

The two parties have up to six months to negotiate a settlement before arbitration proceedings begin, according to Delaney.

 

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