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Developer wins $28M in contract dispute over tourist destination

A contract dispute between the developer of a popular tourist attraction and the tribe that owns it has resulted in a multimillion-dollar judgment for the developer, but whether he’ll see any of that money remains to be seen.

New Jersey residents who have visited the Grand Canyon may have had the opportunity to enjoy the glass bridge that juts out nearly a mile over the abyss. The Grand Canyon Skywalk was completed in 2007 on the Hualapai reservation through an investment of $30 million. For the past year, that investor and the tribe have been engaged in a contract dispute over more than $28 million in management fees the investor says the tribe owes him. Recently the American Arbitration Association ruled in favor of the developer, but the tribe says the judgment isn’t enforceable because the association lacks jurisdiction. It’s now up to a federal court to decide whether the developer should receive the money.

A business arm of the Hualapai tribe said that even if a federal court agrees with the arbitrator’s ruling, it will remain unenforceable because of the tribe’s sovereign immunity. It’s the tribe’s latest defense in a contract dispute that’s lasted more than a year and led the tribe to cut the developer’s interest in the Skywalk. Among the tribe’s complaints, it says the developer failed to complete a visitors’ center and pay for utilities for the attraction. The developer, meanwhile, has accused the tribe of constitutional rights violations in addition to the $28.5 million.

The contract between the two parties specifies that they would use arbitration to settle any disputes, and the tribe helped select an arbitrator and engaged in the discovery process before cutting the developer out of the contract. The arbitrator found that not only did it owe the developer management fees, but the tribe kept inadequate financial records and didn’t make them available to the developer to audit, amounting to a breach of contract, the arbitrator said.

This case may not be over, but for many parties involved in a contract dispute, arbitration can be an easier, less expensive alternative to commercial litigation. A business attorney can tell you whether it’s the best way to resolve your dispute or other legal issue. If you’re looking for a resolution that’s fair, efficient and less expensive than traditional litigation, arbitration or business mediation may be your best choice.

Source: Google, “Grand Canyon Skywalk developer wins $28M judgment,” Felicia Fonseca, Aug. 25, 2012

· Our firm handles a wide variety of contract disputes through commercial litigation and alternative methods. To learn more about our practice, visit our New Jersey contract dispute page.

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