Sino Land unit loses $321m hotel deposit

A Sino Land subsidiary yesterday lost a $321 million deposit to Hang Lung Group after a High Court judge ruled the company had no right to pull out of a billion-dollar hotel transaction.

The two companies were in the Court of First Instance over the construction of the $1.07 billion, 438-room Bay Bridge hotel at Yau Kon Tau, Tsuen Wan, in the late 1990s.

Mariner International Hotels, a subsidiary of Sino Land, sued Hang Lung for the return of $321 million plus $600,000 in damages, claiming the firm breached a 1996 construction agreement.

Mariner accused Atlas, a Hang Lung subsidiary, of using shoddy workmanship and substandard materials. It also claimed the hotel lacked basic infrastructure, such as cable conduits for the computer system.

Mariner claimed problems were first detected when a pre-opening team visited the site in the first quarter of 1997, and that the defendants had embarked on obstructive behaviour, which included barring later inspections.

Hang Lung rejected the allegations, saying Mariner had simply looked for an excuse to back out of the contract, as the property crash of 1997 had made it a 'very bad deal' for them, and had thereby forfeited the deposit.

Mr Justice Michael Burrell yesterday agreed with Hang Lung, ruling that Sino had failed to prove its claim, and that Hang Lung had built a fully functional, full-service hotel.

'Any notion that the overall impression of the hotel lobby was shoddy, pokey or disappointing should be dispelled,' he wrote. 'In fact, it won an Interior Design Award in 1999.'

The Court noted that any faults with the hotel were trivial.

Both parties to the suit declined comment yesterday.