announced that the Circuit Court of Cook County, Illinois issued a ruling today granting the preliminary relief Travelweb sought under its contract with the Internet travel site, Orbitz, Inc (ORBZ).
Today’s decision prevents Orbitz from terminating the agreement between the two companies and from implementing any agreements with hotels and chains under contract with Travelweb. The ruling also requires Orbitz to display on its Website all hotels provided by Travelweb.
“We are absolutely pleased with the court’s decision today. We were confident that the judge would give us the relief we were asking for; our only regret is that we had to seek legal action in the first place. Despite Orbitz’ claims, Travelweb has more than satisfied its obligations under our contract and now, with today’s ruling, Orbitz will be expected to do the same,” said Jaynne Allison, General Counsel and Chief Operating Officer for Travelweb LLC.
In August 2003, Travelweb responded to a Notice of Default sent by Orbitz alleging that Travelweb had not provided Orbitz with competitive hotel rates and inventory. After negotiations to resolve the issues were unsuccessful, Travelweb sought legal action to prevent Orbitz from terminating its existing contract and from engaging in further conduct in violation of the agreement between the two companies which included knowingly seeking and implementing contracts between itself and hotels which were already under contract with Travelweb and refusing to display and sell many of the hotels Travelweb provided to Orbitz.
Meanwhile Orbitz Inc. have issued the following statement following a ruling:
“We’re disappointed in today’s decision by Judge Richard Billik Jr. We
plan to immediately appeal the ruling and have asked for a stay of the
preliminary injunction,” said Jeff Katz, Orbitz president and chief
executive officer. “This is a preliminary decision. We remain confident in
the merits of our case and that we will prevail upon appeal and at trial.”
“In the meantime, today’s ruling enables Orbitz to continue to sign up
additional hotels that are unaffiliated with Travelweb to our fast-growing
Orbitz Merchant Hotel (OMH) program, which has agreements with more than
7,000 properties. Our objective in the hotel field is to provide the
widest possible array of lodging choices at competitive rates. We began
the OMH program as a complement to the merchant inventory offered by
Travelweb, which has been unable to provide sufficient discount hotel room
inventory as promised under its agreement with Orbitz. That contract
expires in July 2005.”