Trump hotel business fails to undo Panama coup

WASHINGTON >> President Donald Trump’s family hotel business has lost a bid to regain control of the luxury hotel in Panama that ousted his brand, according to a new emergency arbitration ruling.

The arbitrator ruled Tuesday that Trump’s company should not have been evicted while a broader arbitration dispute was ongoing between the hotel owners and Trump. But with Trump outmaneuvered in Panama and the hotel in the owners’ hands, the arbitrator declined to reinstate the Trump team. He also barred all parties from starting new legal fights over the matter.

“The facts on the ground now militate against forcibly undoing the steps that have been taken,” arbitrator Joel Richler wrote. He said his decision might be different if Trump had sought an emergency arbitration decision before the hotel owners successfully petitioned the Panamanian courts for help.

Alan Garten, the Trump Organization’s general counsel, declined to comment on the ruling. But in past statements to The Associated Press, he has said that the Trump Organization expects the arbitration process will ultimately find that Trump Hotels’ firing and subsequent removal from the property without an arbitrator’s approval violated Trump’s contract.

Tuesday’s decision dashes the Trump Organization’s hopes of promptly reversing its high-profile eviction from the property, a 70-story luxury high rise on Panama City’s waterfront now named The Bahia Grand Panama. The owners of the property — which was run by Trump under a management agreement — sought to fire his company last October, citing damage to Trump’s brand and mismanagement by hotel officials. But the Trump Organization disputed its termination as illegitimate and refused to hand over the property.

The fight — initially waged in confidential arbitration — burst into the public eye in February when Orestes Fintiklis, the hotel’s majority owner, sought to fire Trump’s hotel management and take control of the property on behalf of the owners’ association. Trump’s family company responded by beefing up its security team and blockading doors — sometimes by building walls in the administrative office’s hallways. Rival teams of hotel security guards skirmished on the property, and police were repeatedly called in to keep the peace.

The standoff ended March 5, when Panamanian judicial officials sided with Fintiklis and a justice of the peace backed by police officers ordered the Trump management team to vacate the property. A workman immediately scrubbed Trump’s name from the hotel, using a crowbar to pry “TRUMP” off the hotel’s signage amid a scrum of news cameras.

Richler’s ruling stated that, under the contract between the hotel owners and the Trump Organization, the dispute over Trump’s firing should have remained in arbitration and never have been brought to Panama’s courts.

Trump’s lawyers made an argument, the arbitrator ruled, that the hotel owners breached Trump’s hotel management contract by seeking outside help from local courts.

But because the arbitator’s finding applies only to his own decision and he chose not to turn over control of the hotel back to Trump, it is unclear whether his decision has any significance.

The arbitrator ordered both sides to split the $40,000 cost of the emergency arbitration evenly and ordered both the hotel owners and Trump to refrain from bringing new challenges against each other until the arbitration is sorted out.

“The parties to the arbitration agreement are enjoined from making any emergency applications concerning the management of the hotel in any forum other than the ICC or the courts of New York,” he wrote — jurisdictions in which the matter has already been contested, including the International Chamber of Commerce.

The parties are still fighting over who broke the hotel management contract and who should pay whom. A $3 million arbitration claim filed by Trump’s business against the hotel and a cumulative $25 million in claims against Trump in arbitration and Panamanian court remain outstanding.