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Guam Supreme Court Reverses Superior Court Decision that Voided Airport Contract

Wednesday, August 12, 2020

GIAA Airport Specialty Concession Contract with Lotte Remains in Force

In a unanimous, 78-page ruling on August 11, the Guam Supreme Court has vacated the Guam Superior Court’s 2018 judgment in DFS Guam v A.B. Won Pat International Airport Authority, Guam (GIAA) that voided the Airport’s specialty retail concession contract with Lotte Duty Free.

“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.