La Palm Dragged to Court Over $21m Debt
The Ghana Commercial Bank (GCB) has dragged the plush La Palm Beach Hotel to the Fast Track High Court seeking summary judgement of over $21 million it contends the Hotel owes it.
However, at the hearing yesterday leading counsel for La Palm, Mr Kwame Tetteh, prayed the court to grant him leave to file his defense because there are triable issues, which the court has to determine.
To defray some of the debt, the Social Security and National Insurance (SSNIT), which has chunks of shares in the La Palm Beach Hotel, has intervened in an agreement with GCB asking the bank to use SSNIT's dividends of $750,000 in a one-stop transaction to defray some of the cost.
La Palm Beach Hotel has admitted to the court that it owes the GCB about $15 million dollars and not $21 million as claimed by the bank and that payment of the cash was not due in terms of memorandum-of-understanding.
Counsel for GCB, Mr. J. B. Quarshie-Idun, in his submission to the court praying for a summary judgement against La Palm Beach Hotel, told the court presided over by Justice Asare Korang that La Palm has admitted its indebtedness to the bank contending that La Palm has no defence to convince the court why they should not pay the cash.
Counsel told the court that if La Palm has any valid defence which they have not disclosed then they should file their defence.
Quarshie-Idun prayed the court to enter summary judgement for Ghana Commercial Bank (GCB) because La Palm basically has failed to settle its debt.
He said that the judge should ignore the pleadings of La Palm to the effect that they have defaulted only in the monthly payments and that the court should deliver its judgement on the accumulated interests only.
Mr. Kwame Tetteh, in his submission, agreed that there was a debt but that the debt has been rescheduled and renegotiated in the memorandum-of-understanding signed by the two parties.
Mr. Kwame Tetteh told the court to grant him leave to file his defence because there are triable issues of fact and legal matters that the court need to determine before it disposes of the case.
He said the memorandum-of-understanding obliged La Palm to pay the interest accrued on the principal over 20 months, paying about $170,000 each month.
He submitted to the court that on the principal amount the two parties agreed that La Palm was mandated to pay $4 million each year for the next five years to the settle the debt.
Mr. Kwame Tetteh, therefore, said that the court needs to hear his client before coming to a conclusion on whether he should grant the summary judgement or allow the case to proceed on its normal course.
After hearing the two top senior lawyers, the judge said that in the memorandum there is a clause for arbitration and that the summary judgement was premature.
He, therefore, urged the two parties to avail themselves of the arbitration forum.
However, both counsels failed to reach an agreement on that.
Explaining, Mr Kwame Tetteh said he was taken by surprise, but conceded that the judge was acting on his legal powers, while Mr. Quarshie-Idun noted that the judge's opinion that the parties should go for arbitration was not before the court.