- In an application filed on May 3, ITCO Investments Limited asked the court to intervene by granting them the order sought and stop the managers from taking control over Pinewood, pending appeal.
- The application comes after Justice Peter Mulwa on April 25 dismissed an application by ITCO in which it sought orders to restrain KCB and Bhatt from selling, leasing or raking up the management of ITCO Investments Limited.
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A company appointed to operate Pinewood Beach Resort and Spa has filed an application at the Court of Appeal seeking to stop KCB-appointed receiver manager Kamal Anantroy Bhatt from taking over the management of the establishment.
In an application filed on May 3, ITCO Investments Limited asked the court to intervene by granting them the order sought and stop the managers from taking control over Pinewood, pending appeal.
The application comes after Justice Peter Mulwa on April 25 dismissed an application by ITCO in which it sought orders to restrain KCB and Bhatt from selling, leasing or raking up the management of ITCO Investments Limited.
The Judge said the application was filed in bad faith as the company did not disclose to the court that active cases were raising similar issues pending at the High Court and Court of Appeal in Mombasa.
The company was faulted for violating the sub judice rule whose purpose is to prevent the filing of a multiplicity of suits over the same subject matter and the same parties or their representatives.
But ITCO through advocate Conrad Maloba, now says the judge made a mistake by failing to appreciate that the cited proceedings in Mombasa are civil, primarily dealing with the issue of trespass where the proceedings they had filed before him were commercial and concerned a separate legal entity.
It has denied participating in the proceedings in the High Court and Court of Appeal as alleged.
It also claims not to be a proprietor of Pinewood Beach Resort and Spa but is appointed as an operator of the said asset.
"There is a real risk that our intended appeal will be rendered useless unless the injunction sought is issued because Pinewood Resort and spa is not an asset charged under the Debenture," says Alnoor Kanji the director of ITCO.
The genesis of the legal battles dates back to December 2010 when Pearl Beach Hotel Limited (PHBL)obtained a loan facility of Sh5.2 billion from KCB to develop the English Point Marina.
ITCO’s director claimed in court documents that KCB required supplementary security for the facility and they offered to create a Debenture over its assets which was done.
A debenture was registered.
This security was additional to the primary security being the subdivision English Point Marina.
But ITCO says they were caught by surprise when the bank stormed Pinewood in August 2023 indicating that they would be placed under receivership and a receiver manager had been appointed.
ITCO claims to have reached out to the principal borrower PBHL and was able to establish that the debt had been settled and that there was even an overpayment.
But KCB says PBHL defaulted and that’s why they appointed Bhatt as the receiver and manager over all the property and assets of ITCO, which included but was not limited to the business of Pinewood.
KCB explained in its documents that their right to enforce the Pinewood debenture crystalized upon default by the PHBL(the principal debtor) and ITCO of their repayment obligations under the facility.
ITCO now says Pinewood in Kwale is not an asset listed in the debenture and there is risk if the orders they are currently seeking are not granted pending an appeal