According to the verdict of the appeals court, the IATA representative need not pay compensation of SR60 million to the travel agency as decided earlier by the Saudi Arbitration Commission.
The appeals court found that the decision of the arbitration commission was based on false information supplied by a faulty translation.
The dispute between the IATA representative and the travel agency was referred to arbitration when the agency delayed the payment of SR3 million for tickets supplied by the IATA representative.
Following the delay, the representative also stopped issuing tickets to the travel agency and directed the Galileo ticket reservation system to stop serving the agency.
The agency demanded the payment of SR58 million to compensate for the loss caused by the IATA representative’s penalty. It also demanded the return of its SR2 million bank guarantee used by the representative.
The arbitration commission granted all demands made by the travel agency and ordered the IATA representative to pay up.
However, the representative did not accept the arbitration and complained to the appeals court arguing that the arbitration commission made its decision on the basis of a wrong translation of documents.
It also argued that it had to use the bank guarantee in order to pay the SR3 million it owed to several airline companies as the travel agency had not paid up.
The appeals court directed the Jeddah court to examine the contract document with the assistance of an accredited translation bureau. It was then revealed that there had been some serious errors in the initial translation.
On the basis of the correct translation, the Jeddah court canceled the arbitration and issued the verdict that the travel agency did not have any right to compensation and supported the IATA representative’s right for using the bank guarantee to pay creditors.
