The owner of Pinewood Beach Resort and Spa has moved to the Court of Appeal to prevent a reception manager appointed by KCB Bank from taking over the establishment in Kwale.
In an application dated May 3, ITCO Investments Ltd, which runs the hotel, said there was a real risk that the intended appeal would become invalid unless the injunction sought was granted.
The company confirmed that Pinewood Resort and Spa is not an asset charged under the bond by KCB.
KCB appointed Mr Kamal Anantroy Bhatt as receiver of the hotel after lifting a court order obtained by ITCO in November last year, blocking the takeover bid.
“The learned judge erred in law and in fact when he found that the plaintiff had not disclosed material information relating to ongoing proceedings touching on the same subject matter, particularly before the High Court and the Mombasa Court of Appeal,” Mr Alnoor Kanji, the court administrator, said. Aetco said.
Mr Kanji maintained that ITCO did not participate in the proceedings pending before the High Court and Court of Appeal, allowing KCB to take over the hotel.
He added: “The plaintiff is a completely separate legal entity from the parties in the Mombasa case, and therefore the present case is not before the courts.”
Last month, High Court Judge Peter Moloa allowed Mr Bhatt to run the hotel, saying ITCO had failed to disclose that similar proceedings were pending in court.
But the judge suspended the decision for 21 days to allow the company to pursue an appeal.
In the ruling, Justice Malwa stated that the application violates the principle of subsidiary jurisdiction because there is another matter related to the same issues pending before the Court of Appeal.
The court heard that sometime in December 2010, Pearl Beach Hotels Limited (PBHL), operating under the name English Point Marina, obtained a loan facility from KCB Bank to develop the marina in Mombasa.
KCB says the loan was secured by debt securities issued by the principal debtor (PBHL) as well as all-asset bonds dated September 12, 2012, issued by ITCO to secure a total principal amount of Sh225 million.
Mr Kanji confirmed that any other securities tendered were complementary to the underlying security, English Point Marina Mombasa, and the hotel would only be used to settle any arrears after the bank had exhausted its options in relation to the underlying security.
The owner noted that the value of English Point Marina exceeds the original amount borrowed and is currently valued at Sh8 billion.
