'BREACHED' CONTRACT

Evicted Italian managers fight to run Watamu resort

Owner allegedly changed some clauses in contract, 12-year agreement signed four years ago

In Summary

• Hotel MD says they spent $1.2 million for renovation and installation of new equipment at the hotel 'that looked like a museum'. 

• Investors say owner changed the court of jurisdiction from Malindi to Milimani and obtained eviction orders in Nairobi.  

Tension is high in Watamu five days after an Italian investor evicted tenants from part of her Sh2 billion tourism investment. 

Since the eviction of VR Club that was running the Sun Palm Resort, that management has attempted to get back to the hotel, now under 24-hour police and local security guard watch to prevent access. 

More than 80 workers of the club have been camping at the gates, holding demos demanding the owner to allow them back inside. 

The top leadership of VR Club Hotels and Resorts — an international group company that operates high-end tourist resorts in many destinations — jetted in after learning of the eviction, which they termed as a breach of contract. 

When reached for comment, Cozzi said they [VR Club] went against the contract, prompting her to take back her property through the court. 

Managing Director Paolo Bo said, however, they invested heavily after signing a 12-year contract four years ago.

Speaking in Watamu, he said that when they took over the resort they spent $1.2 million for renovation and installation of new equipment at the hotel "that looked like a museum". 

Bo said $1 million was spent for renovation alone because they knew they would manage the resort until 2027, but claimed they were shortchanged by fellow Italian investor and owner of the resort, Cozzi.

The remaining $200,000, he said, was spent buying equipment.

Since the eviction, they have lost $100,000 in terms of cancellations and transfer of bookings, Bo said.

The first phase of the 12-year contract was coming to an end in 2021, Bo said, but Cozzi kicked them out after allegedly fraudulently changing some clauses in the contract. 

According to the MD, Clause 12 stated that any dispute arising from the management would be addressed under relevant laws of Kenya and exclusive jurisdiction will be the court of Malindi.

However, he said, Cozzi removed the section of Malindi law courts and sought orders to evict the management from Milimani law courts in Nairobi. 

"We have a company to manage the hotel for 12 years and we have eight years to still operate Sun Palm hotel. Unfortunately, we received an order of termination of this contract from the owner without any evidence," he said. 

Bo said their contract is 100 per cent regular "as they are following all the rules including full payment of rent and everything that the contract stipulates".

He said they do not understand why they received the termination of contract orders from a Nairobi court that had no jurisdiction.

The MD said they took up the issue with their lawyers from the court of Nairobi,  obtained stay orders, served it to the owner through her lawyers and she was informed.

"We verified the orders from the court in Nairobi and we sent the verifications to the OCS of Watamu. From that moment we were supposed to be safe and enter in our hotel to manage the place that was full of tourists.
Paulo Bo. MD of VR Club

But on the same day, OCPD Malindi Vitalis Otieno executed the eviction orders.

He said police said they were not aware of their stay orders and executed theirs at 7.30pm on Wednesday last week. 

Bo said they went to the OCS Watamu to question why their order was not implemented and he told them that it had to be verified.

"We verified the orders from the court in Nairobi and we sent the verifications to the OCS of Watamu. From that moment we were supposed to be safe and enter in our hotel to manage the place that was full of tourists," he said.

The MD said, unfortunately, the order was not served and nobody in authority has supported them and are still trying to understand how they can get backing.

The industry is being affected as international tour operators are cancelling bookings due to the problem, Bo said. 

''The OCPD told us that our order was overtaken by events, and this is also not true which events can stop our order of stay. Practically we are struck by this situation, there are more than 100 employees outside the gates of Sun Palm and we are trying to keep them calm because they are scared of losing their jobs." 

He said there were demonstrations against the investor. 

Those who were evicted, he said. included Raffaele Coniglio – a director of sales at VR Club and shareholder, Carmen Maelione – the General Manager and Johnson Kalisho –the resident manager.

Edited by R.Wamochie