Security guards outside PrideInn Paradise Beach Resort Convention Centre
and Spa at Shanzu in Mombasa, January 28, 2017. FILE PHOTO | NMG
Summary
- The application had been listed for hearing before Justice Patrick Otieno but it was mentioned before another court as he was not sitting.
- Justice Njoki Mwangi on Wednesday extended interim orders which had initially been issued maintaining the status quo between parties.
- The suit will be heard on Wednesday next week.
An application by PrideInn Hotels and Investments Ltd seeking a
temporary injunction restraining Tropicana Hotels Ltd from calling up
for payment or enforcing a bank guarantee for Sh90 million failed to
proceed for hearing on Wednesday.
The application had
been listed for hearing before Justice Patrick Otieno but it was
mentioned before another court as he was not sitting.
Justice
Njoki Mwangi on Wednesday extended interim orders which had initially
been issued maintaining the status quo between parties.
The
hotel which had lost an appeal against an order of liquidation is
seeking for the order pending hearing and determination of the
application.
PrideInn Hotels and Investments Ltd had been placed into
liquidation and subsequently put under receivership by Justice Patrick
Otieno for its inability to pay Sh69.3 million debt prompting it to
appeal against the decision.
Justice Otieno had allowed the winding up petition filed by Tropicana Hotels Ltd saying the debt was not genuinely disputed.
The
Court of Appeal dismissed its appeal but suspended the order of
liquidation for a period of 30 days to enable it make full payments of
all the money due, failure to which the orders of the court shall stand
final.
According to PrideInn, despite the 30 days
suspension of the liquidation order, Tropicana Hotels, through its
lawyer in a letter dated March 22, demanded payment of Sh90 million
under the guarantee issued by a bank to be paid on or before March 29.
Illegal and contemptuous
PrideInn
argues that the demand by Tropicana Hotels Ltd is illegal and
contemptuous noting that the liquidation order has been suspended.
In
his replying affidavit, Mr Kamal Bhatt, a director and shareholder of
Tropicana Hotels Ltd said through the letter by its (Tropicana)
advocates, it did not threaten to wind up PrideInn as alleged but
demanded for the payment of Sh90 million from the guarantor.
Mr
Bhatt said they have no capacity to liquidate PrideInn and that the
court appointed the official receiver as an interim liquidator to take
charge and the running of the affairs of the hotel chain (PrideInn).
“Liquidation
of the debtor will commence on April 21 unless all sums due to
Tropicana Hotels Ltd, shall have been paid in full before that date,”
said Mr Bhatt.
Mr
Bhatt terms the application by PrideInn as incompetent and an abuse of
the process of the court and that the guarantee issued by a bank is
irrevocable.
“The irrevocable guarantee provided, with
the express agreement of the debtor, that the guarantee for Sh90 million
does not affect the petitioner’s right to pursue the debtor for any
sums in excess,” said Mr Bhatt.
He added that the Court of appeal stayed (suspended) the liquidation order but did not stay the irrevocable bank guarantee.
Appellate
Judges Alnashir Visram and Martha Koome dismissed the appeal by
PrideInn saying it lacked merit while their colleague Justice Wanjiru
Karanja dissented.
The application will be heard on Wednesday next week.
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