By Andy Sambidge
Banyan Tree had filed a petition to wind-up Al Areen Desert Spa & Resorts.
Al Areen Holding Company, owner of the Banyan Tree Desert Resort in Bahrain, on Saturday hit back in a legal dispute with the property's operators.
Luxury resorts operator Banyan Tree on Thursday said it had filed a petition in the kingdom to wind-up Al Areen Desert Spa and Resorts - the owner of Banyan Tree Bahrain - to recover $1.12 million owed allegedly to it under a hotel management agreement signed in March 2005 and a settlement agreement that both sides inked in November last year.
But Al Areen has now released a statement saying it "will not tolerate any breach of contract by Banyan Tree Hotels and Resorts to operate the desert resort property".
It said the Bahrain resort had suffered losses due to "poor maintenance of the facility, mismanagement and inactive promotional activities" by the operator.
Tariq Al Jowder, chief executive officer and owners' representative, said in a statement: "We spent more than $200 million on this resort and we will neither tolerate nor accept anything that could compromise its high quality and level of service."
"Numerous international renowned operators have approached us in the past and are still interested to take over management of the facility. We are committed to ensuring the highest international standards and will not hesitate to do so through any means we deem necessary," he added.
"The Banyan Tree Hotels and Resorts did not deliver as agreed in our Hotel Management Agreement and we reserve the right to take the appropriate and necessary action required accordingly," Al Jowder said.
On Thursday, Banyan Tree said the winding-up proceedings against Al Areen "may be completed this year or next”.
It said that if it was successful in the winding-up proceedings, the hotel management agreement would be terminated.