Splendid - Grand Regal dispute claim

DISPUTE CASE WITH GRAND REGAL

DOHA - QATAR



INDEX OF ATTACHMENTS

Page 5 - Letter January 8, 2015 (Al Nasr)
Page 6 - MOU page 5
Page 7 - MOU page 6
Page 9 - Audit 2014 (Statement of financial
position)
Page 12 - Audit 2011 (Statement of income)
Page 13 - Audit 2014 (Statement of income)
Page 15 - page 3, [Schedule B]
Security/Support from the Banking Facility of
Doha Bank
Page 16 – Irrevocable Letter of Assignment to
Doha Bank signed by Sheikha Munira Falih N A Al
Thani
Page 17 - Irrevocable Letter of Assignment to
Doha Bank signed and sealed by Splendid Hotels
Page 20 – page 4 from the Banking Facility of
Doha Bank (items 11 and 12)
Page 21 - Page 6 [Undertakings] item 1 from the
Banking Facility of Doha Bank
Page 23 - Letter sent by Splendid Hotels W.L.L.
to the owners of hotel Grand Regal

3

On January 8th 2015 letter was
delivered and confirmation of receipt
was signed.
This letter can be considered as notice
of dispute but not as termination of
MOU since as per the MOU termination
is possible only if both parties sign
termination agreement or if Court
decides so.

4

GRAND REGAI
HOTEL

'-la,ll:-tll+ Lgls

P.O. Box 22057
Doha - Qatar
Tel : +974 4409 4444
Fax: +974 44Og 4455

[email protected]

www.grandregal.com

08/01/201s

Dear Mr Tiro llievski,

Regarding my last notes to you before 3 days Please be note that I cancel and
Terminate the MOU from Saturday 10 January because you don't co-operate to
reduce the Hotel expenses and you don't achieve the profit amount which you
promise in the beginning of your work in the hotel
Please hand offer your office and all hotel documents to Mr. Tomas
Thank you very much for you efforts with my best regards

MOHAMED H ALNASR
HOTEL OWNER

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The operator has right to terminate the contract in the following cases:

- lf the owner fails to provide suitable premises and equipment required to provide the

class of services described;

- lf the Owner interferes or obstructs in any way daily operation of the Hotel;
- Of the Owner fails in reasonable time, not longer than two months, to mend the latent

structural defects described in the Article 2 item 3.

Each contracted party has right to initiate termination of this Memorandum of understanding
after one calendar year from its beginning.

ln case of early termination without valid reason the Owner agrees to pay to the Operator
compensation equal to 3 (three) months average Management Fee (MF) achieved in the last

Fiscal year, but not less than amount of eR 100,000.

-ARTICLE 7 GOVERNING LAW AND SETTLEMENT OF DISPUTES

1. The Memorandum of understanding shall be governed and construed by the relevant

Laws in Qatar;

2. ln case of disputes arising from or related to this Memorandum of understanding than
the prejudiced party shall submit written notice to the other party explaining the reason
of dispute;

3. The disputes shall be settled amicably;

4. lf the disputes are not settled in period of 30 (thirty) days the two parties shall refer to
arbitration by the competent authorized arbitrator whose decision will be deemed final
and binding for both parties;

5. lf both parties failed to assign arbiter within the period of 45 (forty five) days than both
parties have right to revert to eatari courts.

MEMOMNDUM OF UNDERSTANDING W

t

-ARTICTE 8 MUTUAL RIGHTS AND OBLIGATIONS

This Memorandum of understanding is made and grounded on the principle of good faith, and

both parties undertake to perform in this Memorandum of understanding according to this

principle.

Both parties undertake to respect the confidentiality of provisions of this Memorandum of

understanding in both technical and financial aspects, and to keep the same principles for the
future negotiations if any, throughout its duration.

ARTICLE 9
This Memorandum of understanding is made in two copies of which one for each of the related
parties.

The Owner

W

MEMOMNDUM OF UNDERSTANDING Page 6

On January 8th 2015, after our short
discussion it was agreed that Mr. Tiro
Ilievski, managing partner in Splendid
Hotels W.L.L. will continue performing
the role as General Manager of hotel
Grand Regal.

This was additionally confirmed and
certified on January 12th 2015, with
signature of all three parties on the
official Audit Report for 2014:
Sheikha Munira Al Thani as Owner, Mr.
Mohamed Al Nasr as Manager and Mr.
Tiro Ilievski as General Manager.

5





As shown in the Audit report related to the
operation of hotel Grand Regal in 2014,
the net profit from the operation of 2014
was QR 12,614,611 or QR 2,312,475
higher than the net profit in 2011 when it
was QR 10,302,136, which was the best
one year profit on record from the earlier
period of operation, when the property was
managed by Qatar National Hotels (QNH),
presently known as Katara Hospitality, one
of the most prominent and reputable hotel
management companies in Qatar.

The net profit shown in that Audit report
for 2014 represents 41.73% of the total
revenues, which shows very high profit
margin as per the standards of the
hospitality industry and is also at the
same time proof that the expenses were
lower than the ones custom to the same
industry.

7

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Despite all of the above mentioned on
November 26th 2015 the owners decided
unilaterally to terminate the services of
Splendid Hotels and engage third party in the
operation.

By acting as described above the owners
acted illegally and put Splendid Hotels W.L.L.
in possible legal jeopardy, since as per the
provisions of the signed Contract for Credit
Facility, more specifically section “Other
Conditions” paragraph 12 and section
“Undertaking” paragraph 1 such actions can
be taken only after written approval of the
bank.

Until this moment such letter was not
delivered to me/us by the bank.

10

As per the conditions provided in the Credit
Facility Agreement, and on personal request
of the owners, irrevocable letter of
assignment was signed and delivered with
the other requested documents to Doha
Bank.
This act created legal liability on Splendid
Hotels W.L.L., and by acting so Splendid
Hotels W.L.L. accepted the legal
responsibility as management of hotel Grand
Regal.
Without this clearance and approval of the
Credit Facility wouldn’t be granted.
This was done without any material
compensation.

9

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DOHABANK PRIVATE & CONFIDENTIAL HEAD OF}ICE

Ref: WB/INTl2$15l9 Date: 15.03.2015

Security / Support: [Schedule "B"]

1. Standard charge documents signed by authorized signatories of Grand Regal
Hotel.

2. Personal Guarantee of Sheikha Munira Faleh Naser Ahmed Al Thani and Mr.

Mohd Hamad A AL-Nasr,

3. Loan to be booked in new account under name of Grand Regal Hotel.
4. Cheques to be signed by your good office on half yearly basis.
5. Mortgage over Property No. 2314 (Grand Regal Hotel) at Old Ghanim Area

presently valuing QR 270,700,000^.

6. Fire and Allied perils lnsurance Policy (comprehensive) with joint Bank Clause for

the value of property Title Deeds Nos. 2314.

7. lrrevocable letter of assignment to route future revenues of Grand Regal Hotel,

(property no.2314) through Doha Bank.

8. Letter of assignment for the future revenues to be routed through our Bank from

Ministry of lnterior to Doha Bank, for rented property Nos. 52906 & G3068 (Villa

compound).

9. Tdehepoospiteraatlolr,hGotreanl dreRveegnaule, troeonptsenaandcoarpuothraotreizaeccDoounhtawBithanDkohtoa Bank to
recover
installments/past dues on monthly basis.

Non submission of the above document within 3 months of issue or renewal would
constitute an event of default and would entitle the bank remedies stated under event

of default.

Financial Covenants:

1. Security coverage should not be less than 15Oo/o during the currency of the loan.
2. Minimum Debt Service Charge Ratio ("DSCR") of 1.2X times over the loan tenor

to be maintened.

3. The bank reserves the right to stipulate financial covenant during the tenor of the

facility.

4. Operator /owner to provide yearly audited financials g0 days after financial year

end closure.

*a

Authorized signatories of Grand
Regal Hotel

t' Page 3 of 6

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GRAND REGAL
HOTEL

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P.O. Box 17035

Doha - Qatar
Tel:+974 4409 4444
Fax:+974 4409 44Ss
[email protected]
wwqgrandregal.com

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DOHABANK HIIAD OT'FICE

Ref: WBllNTl2015tg Date: 15.03.2A15

Other Conditions:

5. The interest rates are changeable with any change in Bank's general lending
rates / QCB Repo over limiiand past duei, if any, woull
rate. Further, excess

attract additional 2.5o/o interest, Please also note that a flat fee of eR250i- will be
levied on each defaulted toan installment as per Bank's tariff of charges.

6. Standard tariff of charges will be levied on agreements, such as property

mortgage, Hawala tul Haq.

7. For your insurance related requirements, you may please contact
Mr. Mustafa Mohamad Mustafa
Doha Bank Assurance Company
P.O. Box SS9S3, C-Ring Road, Doha, State of eatar
T et: +97 4-4425-7 SZ 4, Mobite: +97 4-5532_A382
Email : [email protected] I Website: www.dohabankinsurance.com

8. For your Foreign E-xchange services requirements, you may please contact
Doha Bank Treasury Trading and Sales Team
Tet: + 974-4015- 5330
Email: [email protected] I Website: www.dohabank.com.qa

I' For your Retail Banking products & services requirements, you may please contact
Mr. Ali Trad or Mr. Makram Rizkaltah
Doha Bank lnstitutional Team
Tel: + 974-40 iS-424A I 401 5-4728
Email: [email protected] or [email protected]
Website: www.dohabank. com.qa

10.1n conformity with normal banking practice, the Bank reserves the right to review
the said Facility from time to time and to discontinue the terms
same or to vjry
and conditions relating thereto,
the sofe discretion of the Bank. including but not limited to the rate oiinterest, at

11' The Facility is subject to terms and conditions of the Bank's account opening
documentation. Terms and Conditions of this Facility Letter are complementary
and cumulative with those of the Bank's account opbning documentation, credit

facility agreement and alt other documentation executed Oy ttre Customer.

12.This letter and all related documentation inctuding but not limited to Security

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Courts.

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Authorized signatories of Grand
Regal Hotel

Page 4 of 6

WEBSITE : www.dohabank.com.qa K DII STffIFT: DOHBQAeA
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ilffi*ffil PRIVATE & GONFIDENTIAL vr+rl -*5ll

Ref: WB/!NT|?A$I9 HHAD C,FFICE

Undertakings: Date: 15.03.2A15

1. The Customer to advise, as applicable, the Bank in writing (to be duly acknowledged

by the Bank) when there is any change in Customer's l4emorandirm / Articbj of

Association in relation to its Constitution, Ownership, Directors, General Manger of

the company and any amendment in relation to banking. The Bank reserves thJ right
to cancel / amend the amount of the credit Facilities and or terms and conditionJof

the credit Facilities / hold or block the Customer account after assessing the impact

of such changes.

2. You are required to provide the Bank with copy of your audited financial statements
annually within 3 months from close of financial year and Commercial Registration

upon renewal I any amendments.

3. Customer to undertake to remortgage the property prior tenth year of

execution of the mortgage

ItolQ: All documents executed outside Qatar are to be notarized by Notary public and

Iegalized by Qatar's Embassy or Consulate in the country of origin anci attested by Ministry
of Foreign Affairs in Qatar

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Authorized signatories of Grand

RegalHotel

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It is normal and understandable to expect
that by accepting legal responsibility on
owners request without compensation, the
benefit of Splendid Hotels W.L.L. would be to
be awarded with the management of the
hotel throughout the full tenure of the Credit
facility.

This especially considering that the liability
commitment can not be revoked neither by
the management company nor by the owner
without prior acceptance and approval of the
bank who is the only one which can approve
such annulment in writing.

Notice in writing with claim for compensation
to Splendid Hotels W.L.L. was sent to owners
by registered mail.

In it Splendid Hotels W.L.L. claim the right for
material compensation considering the
present circumstances.

11

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PO.Box:24160

As provided in the Article 1 item 8 of the
Memorandum Of Understanding (MOU)
management fee is the compensation that
Owner agrees to disburse to the Operator at
the end of each month.

The amount agreed will be calculated as
follows:
- 2% of the Gross Income (GI) up to amount
of QAR 1,500,000 per month;
- 2.5% of the Gross Income (GI) for the
amount that will exceed QAR 1,500,000 up
to QAR 2,000,000 per month;
- 3% of the Gross Income (GI) for the amount
that will exceed QAR 2,000,000.

The revenues of the period from September
17th 2013 until November 26th 2016 are
shown in the spreadsheet.

Calculation of claimed management fee as
loss compensation is based on the average
management fee of the period when Splendid
Hotels W.L.L. was operating the property
multiplied by the number of remaining months
until the end of repayment tenure of the
Credit Facility.

12

From To date Months REVENUES AVG per % of fee AVG MF MF FO
date month per THE
2.00% 2.50% 3.00%
17-Sep-13 31-Dec-13 3.47 6,853,249 1,976,899 month PERIOD
1-Jan-14 31-Dec-14 12.00 30,214,049 2,517,837 30,000 11,922
1-Jan-15 26-Nov-15 10.87 24,764,778 2,278,967 30,000 12,500 15,535 41,922 145,331
TOTAL 2013-2015 61,832,075 2,348,053 30,000 12,500 8,369
26.33 30,000 12,500 10,442 58,035 696,421

50,869 552,777
52,942 1,394,129

Remaining period until the end of repayment of the Credit Facility.

From date To date Months AVG MF MF for
173 per month the
Nov-15 15-Mar-30
52,942 period

9,158,898