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  • By Pacific island Times News Staff

Supreme Court ruling reinstates airport's contract with Lotte

The Guam International Airport Authority gets to keep its long disputed concession agreement with Lotte Duty Free following a recent decision by Guam Supreme Court reversing a judge's 2018 ruling that voided the contract.

The high court issued a unanimous decision in a 78-page ruling on Aug. 11, vacating the Guam Superior Court’s 2018 judgment on a lawsuit filed by DFS Gua, which challenged the airport's award of a $154 million specialty retail concession contract to Lotte Duty Free in 2013.

“The Supreme Court’s opinion presents a favorable outcome for GIAA and its continued operations of its current specialty retail concession contract,” said John “JQ” M. Quinata, GIAA executive manager. “Our current retail concessionaire—which has been in place since 2013—has generated tens of millions of dollars of revenue and provided financial stability for the GIAA.”

The Supreme Court’s opinion vacated the orders of the Guam Superior Court issued in February 2018 that had granted summary judgment in favor of DFS.

The lower court’s orders had voided the award to Lotte, but stayed the judgment allowing Lotte to remain as the duty free concessionaire until the Supreme Court decided the appeal. Because the Superior Court’s orders are now vacated, the specialty retail concession contract between GIAA and Lotte remains valid and enforceable.

The initial dispute between GIAA and DFS arose after the Guam Visitors Bureau (“GVB”) organized a delegation to participate in promotional activities in Seoul regarding Jeju Air’s inaugural flight to Guam in September 2012.

DFS contended that during the promotional activities in Korea, members of the GVB delegation, including two (2) former GIAA board of directors, had improper contacts with or received improper gifts from Lotte that affected the procurement process. The Supreme Court has now thrown out those contentions and ordered the Superior Court to enter summary judgment in GIAA’s favor on those issues.

The Supreme Court also vacated the Superior Court grant of summary judgment to DFS on alleged technical defects in the procurement process regarding the promulgation of concession criteria. With the applicable law now clarified on a number of issues, the case has been returned to the Superior Court for further proceedings.

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