SSNIT sued over attempts to sell La Palm Hotel

By William Yaw Owusu

Saturday May 12, 2007
THE Social Security and National Insurance Trust (SSNIT) has been sued over its decision to sell the La Palm Royal Beach Hotel, one of Ghana’s most prestigious hotels.

The SSNIT instituted measures last year to sell the hotel for defaulting on payment of a five-million dollar loan facility it guaranteed the hotel in February, 1999.

But its partners, Rexol International, which holds 30 per cent shares in Golden Beach Hotels, owners of La Palm, has filed an application to stop SSNIT from going ahead with the sale.

Hearing of the case began before an Accra Fast Track Court on Friday.

Rexol are seeking among other reliefs a perpetual injunction to restrain SSNIT from “carrying out the purported judicial sale of La Palm Royal Beach Hotel,” and another declaration that “the recovery of the amount of 8,649,937.53 dollars from La Palm Royal Beach Hotel or in the alternative the judicial sale of the hotel by SSNIT contrary to guarantee agreement executed between SSNIT and La Palm Beach Hotel on February 25, 1999.”

Rexol further wanted a declaration that “the purported mortgage deed and fixed charge executed between SSNIT and La Palm Beach Hotel is in breach of the memorandum of deposit of title deeds executed between SSNIT and La Palm Beach Hotel on February 25, 1999.

Furthermore, they seek “to set aside the purported deed of mortgage and fixed charge executed between SSNIT and La Palm Beach Hotel in December 22, 1999.”

Rexol also pray another declaration “by virtue of the joint venture agreement and the contract of indemnity executed in 1999, that all debts of La Palm Beach Hotel including the loan of 5.5 million dollars from Merchant Bank be differed transferred, and absolved by Golden Beach Hotels.”

In its statement of claims filed on June 14, last year, Rexol, argued that they were a limited liability company duly incorporated under the laws of Gibraltar and hold 30 per cent shares in Golden Beach Hotels (Ghana) Limited which is incorporated in Ghana.

They claimed owing 100 per cent shares in La Palm Beach Hotel and would not be able to commence this action while SSNIT hold 70 per cent shares in Golden Beach Hotels on behalf of the workers of Ghana.

The statement of claim said on February 25, 1999, SSNIT and La Palm Beach Hotel entered into a guaranteed agreement by which SSNIT was to guarantee a bridging loan facility obtained by La Palm Hotel from the Merchant Bank to enable the hotel to complete phase one of its development.

“It was further agreed that under the said guarantee agreement, the loan facility would be discharged and/or repaid by either La Palm Beach Hotel Limited or a refinancing package to be obtained by the joint ventureship, being Golden Beach Hotels (Ghana) Limited,” the statement said.

The Plaintiffs claimed that in December 1999, La Palm Beach Limited liquidated all out-standing debts it owed Merchant Bank Ghana Limited adding, this, SSNIT and La Palm Beach Hotel purported in December 22, 1999 to execute a deed of mortgage and deed of legal charge but they are all void.”

Rexol said although the documents or deeds were executed by Isaac Nantwi Kankam, now deceased, who purported to be the Managing Director of La Palm in 1999, “it shall prove to the court that it had already transferred all its shares in La Palm Beach to Golden Beach at the time the execution was done.”

Plaintiffs argued that as a member of Golden Beach Hotels, it was its right to protect all activities of the group including its subsidiaries such as La Palm Beach Hotel and any sale of the hotel would adversely affect its investment.

But, SSNIT in response, contended that Rexol “has no reasonable cause of action against the defendant and is not entitled to the reliefs being sought.

The SSNIT argued that La Palm Beach Hotel “has a distinct legal existence, rights and capacity to conclude transactions, incur liabilities and obligations and to prosecutor or defend its rights and liabilities without interference from parties on the basic of distant corporate relationships.”

The Trust further argued that Rexol is neither a member nor any officer of La Palm Beach and therefore “cannot intermeddle in proceedings involving the enforcement of a liability against La Palm Beach Hotel Limited.”

It said among other things that the La Palm Beach Limited and SSNIT expressly agreed that SSNIT is entitled without prejudice to any other option available incurred by La Palm Beach Limited by reason of a default.

The Golden Beach Hotel Limited and La Palm, the Trust noted defaulted in the repayment of their loans even though demand notices were on November 24, 1999 served on them by Merchant Bank and the bank writing to SSNIT in December 6, 1999, to demand payment of the outstanding debt of 5.5 million dollars in satisfaction of the guarantee.

The court presided over by Justice E.K. Ayebi, has adjourned proceedings until May 22 for Rexol to continue with their evidence.