SWITZERLAND. Airport food & beverage operator Montreux Jazz International (MJI) has served Notice of Arbitration claiming a minimum CHF90 million (US$93 million) against long-time partner, UK and international travel catering giant SSP.

The arbitration follows an earlier case in which SSP had sought damages against MJI and particularly its Chairman Peter Rebeiz (also Chairman and CEO of Caviar House & Prunier) for alleged complicity in SSP losing its F&B contract at Geneva Airport.

“SSP rejects MJI’s claim as baseless and will of course strongly defend the claim. We will not comment further while proceedings are ongoing.” – SSP spokesperson

That claim failed on 23 November 2019, when an arbitral tribunal ruled in favour of MJI and awarded costs to the defendant, which have since been paid.

MJI, having earlier reserved the right to raise new claims in a subsequent arbitration, has now done so in a case filed on 23 December 2019.

An SSP spokesperson told The Moodie Davitt Report: SSP rejects MJI’s claim as baseless and will of course strongly defend the claim. We will not comment further while proceedings are ongoing.”

“Once SSP had secured worldwide exclusivity they simply stopped any kind of attempt to develop the brand. We believe now that this was a complete deliberate decision thus ensuring that no one – including me – would or could put their hands on the brand.” – Peter Rebeiz

(Above and below) Montreux Jazz Café at Geneva Airport, now run independently

BACKGROUND TO THE CLAIM

MJI, based in Montreux, was created exclusively to generate revenues to support the famed Montreux Jazz Festival, an annual event whose video and audio archive was granted UNESCO heritage status in 2013.

MJI (then called Montreux Experience) was created by Rebeiz in 2005/06 with the notion of creating a Montreux Jazz Café concept (that would feature screens showing videos from the Festival) and rolling it out exclusively into travel locations. To allow the plan, Rebeiz had struck a licensing agreement with Montreux Jazz Festival founder Claude Nobs.

Happier days in June 2007 as SSP CEO Andrew Lynch and Caviar House & Prunier Chairman and CEO Peter Rebeiz celebrate a new worldwide partnership

In 2007, Rebeiz entered into an alliance with SSP, giving the UK company the exclusive rights to operate all new Caviar House & Prunier seafood bars in travel locations worldwide.

Rebeiz was also keen to extend the Montreux Jazz Café’s presence to airport and railway locations around the world, leveraging SSP’s network.

SSP, keen to win the F&B contract at Geneva Airport, due to be awarded in 2008, agreed to include a Montreux Jazz Café in the Geneva bid and to develop the concept worldwide.

Montreux Experience and SSP struck a licensing agreement on 7 July 2011. MJI claims in its latest arbitration claim that SSP had committed to honouring qualitative standards while paying a royalty and fees. SSP, which had won the Geneva contract in 2008, subsequently opened two Montreux Jazz Cafés at Sydney (part of a 12-outlet concession) and Zurich airports in 2010 and 2011. Rebeiz agreed not to take a royalty from the Sydney concession, which has since been closed.

Rebeiz and Nobs then convinced SSP to open a Montreux Jazz Café at the Gare du Lyon station in Paris. In its claim, MJI alleges that SSP let the quality of the Montreux Jazz Café deteriorate while promoting other SSP locations at the station.

MJI claims that SSP had, in return for exclusivity, agreed to open five Montreux Jazz Cafés by 31 December 2013 and ten by 30 June 2016. Instead, the legal filing suggests, no more outlets were opened and that the outlets in Zurich and Geneva airports were operated “miserably”. The Sydney outlet closed in May 2013 and the operation at Gare du Lyon was a “catastrophe”, MJI alleges. SSP’s exclusivity for Montreux Jazz Café expired at the end of 2013 as a result of the lack of development, MJI alleges.

Peter Rebeiz claims SSP stopped trying to develop the Montreux Jazz International brand

Rebeiz told The Moodie Davitt Report: “Once SSP had secured worldwide exclusivity they simply stopped any kind of attempt to develop the brand. We believe now that this was a complete deliberate decision thus ensuring that no one – including me – would or could put their hands on the brand.”

SSP rejects that proposition and what it dubbed MJI’s entirely “baseless” claim.

SSP lost its Geneva Airport F&B concession in March 2015. It then sued MJI, claiming a conspiracy between MJI and the airport to prevent SSP from winning the concession.

MJI is claiming CHF90 million (US$93 million), subject to further readjustments after a forensic accountant’s report. This is based on the loss of royalties caused by the failure to open the agreed numbers of cafés and kiosks as well as the loss of shareholder value as a consequence of “forced inactivity”.

MJI is also claiming CHF341,446.95 (US$363,295.63) in unpaid royalties from the Zurich and Sydney airport contracts. Additionally, MJI alleges that SSP is using Montreux Jazz Café proprietary materials at a Grand Comptoir outlet at Gare du Lyon station (which replaced the café) and plans to seek damages. MJI is also seeking costs.

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The company also organises the annual Airport Food & Beverage (FAB) Conference & Awards. FAB 2020 will be held in Istanbul on 23 and 24 June. Istanbul Airport will host the event, which will be a celebration not only of the best in international airport dining but also of Turkish cuisine and culture. FAB 2020 will be supported strongly by Tum & Ictur, the concessionaire managing 34,000sq m of food & beverage space at Istanbul Airport.