The proprietor of Pinewood Beach Resort and Spa has moved to the Court of Appeal to block a KCB Bank-appointed receiver manager from taking over the establishment in Kwale.
In an application on May 3, ITCO Investments Ltd, which runs the hotel, said there was a real risk that its intended appeal would be rendered nugatory unless the injunction sought is granted.
The company maintained that Pinewood Resort and Spa is not an asset charged under the debenture by KCB.
KCB appointed Mr Kamal Anantroy Bhatt as the receiver manager of the hotel after the lifting of a court order obtained by ITCO in November last year, blocking the takeover bid.
“The learned judge erred in law and in fact by finding that the plaintiff did not reveal material information concerning active proceedings touching on the same subject matter, particularly before the High Court and Court of Appeal in Mombasa,” Mr Alnoor Kanji, the director of ITCO said.
Mr Kanji maintained that ITCO did not participate in the proceedings pending before the High Court and Court of Appeal, allowing KCB to seize the hotel.
“The plaintiff is a completely separate legal entity from the parties in the Mombasa case and as such the present suit is not sub judice,” he said.
Last month, High Court judge Peter Mulwa allowed Mr Bhatt to manage the hotel saying ITCO failed to reveal that similar proceedings were pending in court.
The judge, however, suspended the decision for 21 days to allow the company to pursue an appeal.
Justice Mulwa stated in the ruling that the application violated the doctrine of sub judice since another matter, touching on the same issues, is pending before the Court of Appeal.
The court heard that sometime in December 2010, Pearl Beach Hotels Limited (PBHL), trading as English Point Marina, obtained a loan facility from KCB to develop the marina in Mombasa.
KCB says the loan was secured by among others, debentures issued by the principal debtor (PBHL) as well as an all-asset debenture dated September 12, 2012, issued by ITCO to secure an aggregate principal amount of Sh225 million.
Mr Kanji maintained that any other securities made were supplemental to the primary security, English Point Marina Mombasa, and the hotel would only be utilised to settle any arrears after the bank had exhausted its options in respect of the primary security.
The proprietor pointed out that the value of English Point Marina is more than the principal amount borrowed and it was currently valued at Sh8 billion.
