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Banyan Tree Terminates Bahrain Resort with Immediate Effect

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Banyan Tree Hotels & Resorts has terminated with immediate effect its management contract for the Banyan Tree Al Areen resort in Bahrain.

On 8 April 2010, Banyan Tree issued a notice of intention to terminate as a further step to its earlier petition in March to wind up Al Areen Holding Company, the owner of the resort, for what it calls continuing breaches of the management contract.

Termination of an agreement usually requires a notice with a transition period of two weeks, but Banyan Trees termination of the management contract is with immediate effect. Notices have been sent to all staff, suppliers, travel agents and wholesalers, and hotel guests, that Banyan Tree will not be responsible for anything happening at the resort, nor for any loss, damage, costs, expenses or other claims arising from any stays, transactions with, visits to or usage of the services and facilities of the resort.

The termination was supposed to be effective 15 days after issuance of the notice if the breaches were not rectified, and during this transition period, Banyan Tree was supposed to continue to manage the resort as per the management contract, said Mr. Ariel Vera, Group Managing Director of Banyan Tree Holdings Ltd. However, upon issuance of the termination notice on 8 April, the owner decided to further breach the contract and immediately took over the resort on the following day. This has resulted in infringements on our brand rights, and inconvenience and confusion to our guests and associates, travel partners and suppliers. We therefore have no choice but to immediately cease our involvement with the resort.

Banyan Tree has said it will be taking legal action against Al Areen.

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