Himachal-Oberoi dispute over colonial-era Hotel Wildflower Hall far from over

Pratibha Chauhan

Shimla, June 22

Even as the Himachal Pradesh Cabinet on June 20 approved the execution of the 2005 arbitration award on the benefit-sharing dispute between the state government and Oberoi group’s East India Hotels (EIH) over the colonial-era Hotel Wildflower Hall at Charabra, the transition might be far from easy.

“We will soon be writing to the EIH to comply with the 2005 award so that the state gets its legitimate dues,” confirmed a senior government officer. It was the EIH that had, in July 2005, moved court against the execution of the award of the Arbitrator to retain hold over the luxury property comprising over 100 hectares of land, including a pristine deodar forest. In 2022, the EIH, however, approached the government to execute the award after the Himachal Pradesh High Court dismissed the hotel group’s petition.

Built by Lord Kitchener in 1902, Hotel Wildflower Hall was being run as a high-end hotel by HP Tourism Development Corporation before it was gutted in a devastating fire in 1993. It’s then that the state government floated global tenders for running it as a five-star property. It was handed over to the EIH for being run by way of a joint venture, ‘Mashobra Resorts Limited’. With irritants cropping up every now and then, the government issued an order on March 6, 2002, terminating the agreement on grounds of “breach of terms”.

Sources said settlement of the dispute could yet again get prolonged as there was bound to be a disagreement over the present value of Rs 12 crore awarded by the Arbitrator 18 years ago in favour of the government. While the government has worked out its share to be around Rs 400 crore, the EIH is bound to object to the amount, which could result in more legal wrangles.

Sources said the award of the Arbitrator was in favour of the government, which had contested the skewed equity ratio after feeling it to be “in favour of the EIH”. Issues like not making the hotel functional in mandated six years and non-regularisation of 57 rooms by the Town and Country Planning Department remained disputable.

The dispute also assumed political overtones with the joint venture being set up during the then Virbhadra Singh-led Congress regime and the BJP government led by PK Dhumal terminating it on the grounds that “Himachal’s interest were sold”.

5-star Shimla hotel stuck in legal wrangling for 18 years

• Hotel Wildflower Hall was a high-end hotel run by HPTDC before it was gutted in a fire in 1993
• After floating tenders, the state handed it over to Oberoi group to run it as part of a joint venture
• As irritants kept cropping up every now and then, the govt ended the contract on March 6, 2002
• In 2005, the Oberoi group moved court against execution of award announced by an Arbitrator