Blue pearl opposes 4bn/- payment

THE rental charges dispute involving Blue Pearl Hotel and Apartments Limited and Ubungo Plaza Limited has taken a new turn following the hotel to seek intervention of Court of Appeal to stay the execution of the decree for 4bn/- payments.
 
In an application that has been filed under certificate of urgency, Blue Pearl Hotel and Apartments Limited, as applicant, has advanced several grounds, stating that if the execution is carried out it would cause substantial loss and may pre-empt the decision of the Court of Appeal in the intended appeal.

Advocate Henry Massaba, for applicant, further states that his client has already lodged a notice of appeal against the whole judgment and decree of the High Court dated November 3, 2017 and that the application for stay has been filed without inordinate delays.

He states that security shall be given for performance of the decree in question and that the appeal that would be filed to challenge findings of the High Court stands a good chance of success. Mr Massaba states, therefore, that if execution would be carried out the appeal would be rendered nugatory.

In the certificate of urgency, the advocate states that the matter is of extremely urgent due to the fact that Ubungo Plaza Limited, as respondent, have applied for arrest and detention of Mr Rustamali Merani as civil prisoner, purportedly the Managing Director of the applicant.

Through advocates Elisa Msuya and Oscar Msechu, Ubungo Plaza Limited is seeking to execute the judgment given by High Court Judge Rehema Samaji for alleged failure to satisfy the court decree for such rental fees payments.

However, the applicant’s General Manager, Mr Nigel Perera, in his affidavit to support the application, is stating that the respondent’s actions and further execution of the decree would cause substantial loss of reputation in the hospitality industry and financial institutions.

He stated that Ubungo Plaza Limited choice of mode of execution of arrest and detention, if implemented, the applicant’s good will and reputation are likely to be diminished irreparable and such damage could not be atoned by monetary compensation.

Mr Perera further states that Brue Pearl Hotel and Apartments Limited is ready and willing to give the security for the due performance of the decree, as may be determined by the court. He further explained that the respondent has not issued any demand for the payment of the claimed sum.

According to him, the respondent has further not followed the procedure of disposing off the properties of the applicant after obtaining execution order and finally to lift the veil before resorting to arresting and detaining Mr Merani as director and shareholder of the applicant.

He concluded by stating that the said intended appeal has overwhelming chances of success due to the fact that the suit was filed against the wrong defendant and judgment issued on the applicant and there were flaws in the findings liability for rent and damages.

Already the applicant has moved the High Court to grant orders for leave to appeal to the Court of Appeal against the highly contested judgment and decree. Judge Ama Munisi is set to hear such application on May29.

On October 19, 2006, the parties entered into a lease agreement where Blue Pearl Hotel and Apartments Limited rented and took occupation of one of the two towers complex of Ubungo Plaza for use as a hotel and for conference facilities together with allied amenities and essential equipment.

The lease agreement was for a period of 15 years from October19, 2006 to 2021. The payable monthly rate was 45,000 US dollars for the first two years, 50,000 US dollars was payable for third to fifth years and thereafter the total monthly rent was to be increased by eight percent compounded, annually.

On December 10, 2013, Blue Pearl Hotel and Apartments Limited commenced arbitration proceedings against Ubungo plaza limited, alleging material breach of the lease agreement.

After a full determination, the arbitral panel ordered the plaintiff to pay the defendant 3,171,854 US dollars.

However, Ubungo Plaza Limited filed a commercial case before the High Court, which later nullified the award, ruling that the Arbitrator had failed to observe the principles of impartiality and for misconduct.

In this decision, Blue Pearl has also lodged a notice of appeal to challenge the same.