Oxley boss in legal tussle with Italian contractor over Venetian hotel

Singapore

PROMINENT Singapore businessman Ching Chiat Kwong is involved in a legal dispute with an Italian contractor over a luxury hotel, Palazzo Donà, that he is developing in Venice, Italy, as well as another hospitality project, Fonti Toscana Country Resort, in the Italian town of Certaldo.

For the Palazzo Donà, the dispute is over a remaining sum of about 230,000 euros (S$357,406) that has not been paid to its former contractor, Sama Global, despite the termination of the latter's contract in August 2018.

The hotel, located in Campo Santa Maria Formosa, a city square in Venice, was formerly a municipality building. It was sold to Grandeur Oxley, Mr Ching's private investment vehicle, for 7.1 million euros three years ago.

The renovation work cost about 6 million euros and was largely completed by mid-2018. Avv Francesco Ceccherini, Mr Ching's lawyer in Italy, said that the company has paid its main contractor, Sama Global, 5.7 million euros, but there remains a "small" sum of about 230,000 euros that is being disputed.

He said this is because Grandeur Oxley is challenging the contractor on the quality and quantity of the works to which the sum refers, and also alleging that Sama Global has not paid employees, suppliers and subcontractors. Grandeur Oxley is thus choosing to retain this sum to protect the payment of these parties.

It added that there were also unmet deadlines and incorrect execution of works and materials used.

In response to queries from The Business Times, a spokesperson from Sama Global denied all the allegations and said it only has one dispute with a supplier, out of more than 200 suppliers in total.

The Italian Court in February this year granted a provisional injunction against Grandeur Oxley to pay the balance sum to Sama Global. The case is still pending, and the next hearing is set for May 28, 2020.

Sama Global was also the contractor for the Fonti Toscana Country Resort hospitality project in the Italian town of Certaldo, which is currently also under legal dispute between both parties over unpaid fees and disagreements over the quality of work done. The project is undertaken by Società Agricola Fonti, a company wholly owned by Mr Ching.

This is not the first time Mr Ching is facing contractor issues that have become public.

In February this year, his company Oxley Holdings' subsidiary, Oxley Gem (Cambodia) Co, said it was planning to seek compensation from its former contractor Sino Great Wall International Engineering Co (SGW) for damages suffered after repeated breaches of its contract.

SGW was the main contractor for The Peak, a 55-storey mixed hotel development project in Cambodia.

In an SGXNet announcement, Oxley laid the blame for project delays on SGW.

Oxley Gem had therefore called on the two performance bonds provided by SGW for the project, and terminated the contract with SGW last October.

It also commenced legal action on SGW for refusing to vacate the project site and wrongfully occupying it, resulting in further delays as the new contractor was unable to begin work. Oxley Gem obtained an injunction order to evict SGW with effect from Feb 25, and is also seeking compensation from SGW for damages suffered.

BT understands that SGW is disputing Oxley's allegations.