A bitter legal dispute has emerged between the Hilton Hotel
chain and Michel Ohayon, the French-Jewish businessman and former owner of the
Waldorf Astoria Hotel in Jerusalem. The Jerusalem District Court has imposed a
temporary injunction on Ohayon's properties in Jerusalem amounting to NIS 99
million ($26.8 million) at the request of Hilton Worldwide, who claimed that
Ohayon was in violation of a previous ruling.
Two previous arbitration rulings regarding the dispute
between Ohayon and Hilton were made in London by the International Chamber of
Commerce (ICC). Hilton is seeking for the arbitration rulings to be enforced
against Ohayon in Israel as well. He can either fight their suit or file a
request to dismiss the injunctions.
The Hilton Hotel chain has previously operated the Waldorf
Astoria complex, which was bought by Ohayon in 2017 from the Canadian Reichmann
family for $160 million. Ohayon signed personal guarantees promising to abide
by Hilton’s existing agreements, including management of the hotel by Hilton
Worldwide and the granting of a loan and a license for Ohayon to use the
hotel's name. Hilton says that Ohayon has failed to comply with the terms of
the loan and hasn’t paid the license fees for using the hotel's name. Hilton
has demanded immediate repayment of the debts.
Following the initial arbitration between the two parties in
London, Ohayon was ordered to pay Hilton $18.5 million - $2 million for the
license fees and $16.5 million for the loan and other key fees. In late 2022,
Ohayon was then ordered to pay an additional $3 million in interest on the
loans and about $1.5 million for legal fees and arbitration costs. In total,
Ohayon was ordered to pay NIS 99 million ($26.8 million).
Hilton attempted to collect the debt in France, where it
obtained enforcement of the arbitration ruling in court, but it was
unsuccessful. Hilton claimed that Ohayon owned properties in Israel and
therefore filed a request to enforce the arbitration ruling in Israel and
impose injunctions on his properties. Hilton requested that the injunction be
one-sided to prevent Ohayon from moving assets out of the country. "Ohayon
has not paid a single penny of the large sums determined in the
arbitration," Hilton said in its petition to the Jerusalem District Court,
which eventually approved the injunction on Ohayon's properties.
The Waldorf Astoria Hotel, with 226 rooms and ten floors, is
located at the corner of Agron and King David streets in Jerusalem and is
considered one of the most luxurious hotels in the city. The hotel was built on
the foundations of the historic Palace Hotel, built in 1929 by the Mufti of
Jerusalem, Hajj Amin al-Husseini.
The Reichmann family purchased the building in 2006 for $20
million and built the new hotel, which opened in 2014 after an investment of
$150 million. The family sold the hotel to Ohayon only after the Israel Money
Laundering and Terror Financing Prohibition Authority (IMPA) examined the funds
that Ohayon transferred from Europe.
Ohayon lost control of the hotel in 2020 after his loan from
investment fund York Capital Management, managed in Israel by Jeremy Blank,
defaulted. York's legal proceedings against Ohayon took place in a Luxemburg
court.
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