UPDATE 1-Togo evicts hotel group Accor amid contract dispute

Sun Jul 13, 2014 8:29am EDT

Related Topics

* Government says Accor did not fulfil its contract

* Accor seeks arbitration in Paris ICC court-documents

* Africa's $24 bln market a key region for hoteliers (Adds bullets, details of case before ICC, comment)

By Emma Farge and John Zodzi

DAKAR/LOME, July 13 (Reuters) - Togo has ordered Europe's largest hotel group, Accor, to quit the country immediately or face more than 500,000,000 CFA francs ($1.05 million) in daily fines, according to the hotel group and court documents.

The order is the culmination of months of legal wrangling between over the renewal of Accor's rental agreement for its beachside Sarakawa hotel in Lome, the Togolese capital.

"The decision took effect immediately and therefore Accor has no other choice to stop operations at the hotel," the company said in a statement on Sunday, referring to an eviction order given on July 11.

Togo's government said it was compelled to order Accor's expulsion "for neglecting its contractual obligations", a statement said, without elaborating on the obligations.

A Reuters reporter at the site said there was no sign of tourists and policemen were guarding the main entrances. The government said it plans a tender to find a new operator for the property.

"This is a very bad sign for foreign investors, given that Lome has clearly violated the OHADA law," said Jean-Georges Betto, a partner in the Paris law firm Betto Seraglini who is acting for Accor, referring to a legal treaty governing business law in West Africa.

Accor filed an arbitration request at the Paris-based International Chamber of Commerce court in May against the Togo government, seeking 10 million euros, after the government gave notice that its lease would not be renewed, confidential documents showed.

The documents indicate that the decision not to renew the 15-year lease was sparked by government dissatisfaction over investment in the facility. Accor says it spent on average 5.5 billion CFA francs a year and was preparing plans to invest in a new Ibis hotel on the site, the documents showed.

Sub-Saharan Africa, once a niche market for hoteliers, is becoming an increasingly important region for large hotel groups like Marriott International, which are seeking a bigger stake in the $24 billion market.

The economy of former French colony Togo, which has resources of phosphate, iron and magnesium, is due to grow by 6 percent this year, providing potential opportunities for business travellers.

The tribunal document also showed the government had originally sought 1 billion CFA in daily fines for non-compliance with the eviction order.

($1 = 477.75 CFA) (Reporting by Emma Farge and John Zodzi; Editing by Larry King)

FILED UNDER: