Court orders auction of Bwawani Hotel

1 12 2009

Zanzibar High Court yesterday ordered the auction of Bwawani International Hotel following the Zanzibar Government’s failure to pay a Thai firm 1.6trn/- in debt.

The famous and historic hotel was built by the founding president of the Zanzibar Revolutionary Government, the late Sheikh Abeid Amani Karume and has since been property of the Isles government. The decision was reached after the Thai firm – Leamthore Rice Ltd won a civil suit it had filed against the Zanzibar government.

The case was filed against the Permanent Secretary in the Zanzibar Ministry of Finance and Economic Affairs, after the Isles government had procured rice from the company and failed to pay on time. The company filed the civil case in January 1997 following the Ministry’s failure to pay them the outstanding debt of $69.4m.

The company which was being represented by advocate Masumbuko Lamwai further asked the court to order the hotel to pay them 25 per cent interest for all the time the debt was outstanding, including costs of running the suit. The court’s decision follows failure by the then Permanent Secretary Omar Sheha Mussa to obey the court’s order to appear in court.

Reacting to the court decision, the management of the hotel tried to appeal against it, but they were late in lodging their appeal and therefore ordered to pay the 25 per cent interest, bringing the total sum owed to $1.6bn, equivalent to a three -year budget of the Zanzibar government based on the current figures.

The business contract was entered into by the fourth phase government under late Idris Abdul Wakil and former Chief Minister Seif Shariff Hamad. If the order is to be implemented other companies will also suffer because the hotel has leased offices to tourism business and cargo agents.

The High Court Registrar, Yesaya Kayange, endorsed an earlier verdict delivered on May 16, 1997 by Judge Wolfgang Dourado. According to a letter written on November 12, this year, Kumekucha Auction Mart was ordered to auction the hotel which is a few metres from Zanzibar’s Mji Mkongwe city centre.

“So as to be sure that justice is done, the verdict to auction the hotel must be implemented in order to pay the debt,” said the registrar.

Elaborating, the registrar said that earlier the court had ordered the auction of a Government land located at Kijichi village in Zanzibar. However, the order could not be implemented because it was not clear where the hotel border lines ended.

Speaking with The Guardian, Salim Ahmed Salim from the auctioning company confirmed to have received the court order. He said preparations were underway to implement the auction including giving notice to the owners of the hotel. No immediate Government reaction was forthcoming over the court order.





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