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By FAUSTINE KAPAMA, 26th December 2010 @ 11:00, Total Comments: 0, Hits: 212
THE Court of Appeal has ordered for fresh hearing of the commercial dispute between the CDRB Bank and Scandinavia Tours Limited over payment of 1.144bn/- loan facility.
Justices January Msoffe, Laurian Kalegeya and Chande Othman, quashed all proceedings of the High Courts Commercial Division and set aside the judgement issued by Judge Salum Massati on April 13, 2007, requiring the company to pay the bank 1,144,364,228/-.
We accordingly order the High Court to reconstitute itself and retry the said case, the justices ruled. They were forced to order for retrial of the case because records of appeal filed by Scandinavia Company to challenge the payments were not complete as some of records could not be retrieved from the High Court registry.
In his judgement, Judge Massati had ruled in favour of the bank after the company failed to repay the loan obtained for the purpose of purchasing passenger buses in 2002. The companys default to service the loan forced the bank to appoint a receiver, who in turn seized and sold some of the buses in attempt to recover the amount.
The whole transaction started in 2002 when the company executed a security loan of 2.2bn/- to enable it to purchase 10 passenger buses. The loan, as per the agreement, was to be paid within 50 months.
However, the company did not follow the terms of the repayment agreement. Thereafter, the CRDB instructed Mpoki and Associates to place the company under receivership. The law firm advertised its appointment and intention to seize the mortgaged properties. However, the firm seized three buses only and on its own the company surrendered five buses, which were sold at 600m/- in total.
As at November 28, 2005, there was an outstanding amount of 1,375,241,242 as principal and 369,122,981 as loan arrears. After applying the proceeds of the sale and reducing the costs and taxes, the outstanding sum was reduced to 1.4bn/-.
The company took the matter to the court to challenge the appointment of the receiver and that his subsequent actions to seize the buses were illegal. At the same time, the bank filed a counter claim. At the end of trial, Judge Massati found the bank to have proved its claims and entered a judgment against the company.
THE Court of Appeal has ordered for fresh hearing of the commercial dispute between the CDRB Bank and Scandinavia Tours Limited over payment of 1.144bn/- loan facility.
Justices January Msoffe, Laurian Kalegeya and Chande Othman, quashed all proceedings of the High Courts Commercial Division and set aside the judgement issued by Judge Salum Massati on April 13, 2007, requiring the company to pay the bank 1,144,364,228/-.
We accordingly order the High Court to reconstitute itself and retry the said case, the justices ruled. They were forced to order for retrial of the case because records of appeal filed by Scandinavia Company to challenge the payments were not complete as some of records could not be retrieved from the High Court registry.
In his judgement, Judge Massati had ruled in favour of the bank after the company failed to repay the loan obtained for the purpose of purchasing passenger buses in 2002. The companys default to service the loan forced the bank to appoint a receiver, who in turn seized and sold some of the buses in attempt to recover the amount.
The whole transaction started in 2002 when the company executed a security loan of 2.2bn/- to enable it to purchase 10 passenger buses. The loan, as per the agreement, was to be paid within 50 months.
However, the company did not follow the terms of the repayment agreement. Thereafter, the CRDB instructed Mpoki and Associates to place the company under receivership. The law firm advertised its appointment and intention to seize the mortgaged properties. However, the firm seized three buses only and on its own the company surrendered five buses, which were sold at 600m/- in total.
As at November 28, 2005, there was an outstanding amount of 1,375,241,242 as principal and 369,122,981 as loan arrears. After applying the proceeds of the sale and reducing the costs and taxes, the outstanding sum was reduced to 1.4bn/-.
The company took the matter to the court to challenge the appointment of the receiver and that his subsequent actions to seize the buses were illegal. At the same time, the bank filed a counter claim. At the end of trial, Judge Massati found the bank to have proved its claims and entered a judgment against the company.
