Jun 26, 2022

Mawazo Writing Africa

Writing about the main

Judge allows sale of Dusit hotel complex over Sh5 billion debt

Justice Alfred Mabeya denied a motion by I&M Bank and its administrator to stop the sale. They argued that the company that owns the building owed them $ 25 million ($ 2.82 billion).

The complex is owned by Cape Holdings Ltd and has been in a dispute over since 2010 involved in a botched sales contract. Synergy Industrial Credit, which is auctioning the property, paid SH750 million to purchase some of the apartments, but the deal failed and the matter was referred to an arbitrator. Since then the debt has risen to Sh 4.5 billion. plus interest increased.

The judge ruled that it was not necessary for Synergy to obtain the administrator’s approval through senior attorney Ahmednasir Abdullahi before proceeding to auction the property.

Justice Mabeya said the lender’s indictment was a moratorium on the company to allow it to evade its legal obligations.

Synergy entered a reservation by court order in 2011, warning the public about the property . “With such a reservation, this property could not be transferred as security,” said the judge.

The dispute revolved around a transaction in which Synergy bought two of 14 apartments under construction and Sh750. paid millions in advance. When the property was completed, Cape Holdings refused to transfer the property and the matter was referred to arbitration.

In 2015, arbitrator James Ochieng Oduol ordered the developer, the principal and the interest totaling Sh1. reimbursed 0.66 billion.

Cape Holdings then sued the High Court and persuaded the court to set aside the award on the grounds that it was found wrong.

This prompted Synergy to go to the Court of Appeal go and the award was restored, while attempts by Cape Holdings to go to the Supreme Court and overturn the decision were dismissed by the Supreme Court.

In an October 8 ruling, the Supreme Court ruled that due of jurisdiction, this would not affect the judgment of the court of appeal that upheld the award.

“We repeat our point of view and find that the court has no jurisdiction over this appeal. After this has been determined, we have no hesitation in applying the motion that we have before us to be dismissed, ”says Martha Koome, Mo. Ruled at the Supreme Court were hammed Ibrahim, Smoking Wanjala, Njoki Ndungu and Isaac Lenaola.

I&M Bank appointed Mr. Vruti Shantilal Shah as administrator in October, but Synergy denied the move, saying it was fraudulent because Cape Holdings will be able to pay off his debt from the rent that has been collected from the property.

Mr. Abdullahi then moved to the High Court and sought Synergy’s permission to auction the property and get their money back , but Mr Shah declined the proposed sale, saying the company had been placed under management. The judge said the bank would not suffer any disadvantage for holding other securities while the Sale would result in irreparable losses for Synergy as their offer to reclaim the money would be delayed.