The owner of the prestigious 14 Riverside Drive where Dusit D2 Hotel sits has been dealt a blow in court after a decision was made, dismissing his prayers in a more than Sh5.5 billion dispute.
Cape Holdings Limited and Synergy Industrial Credit have been embroiled in a court battle, over a botched deal in 2011, where the latter paid over Sh700 million for two blocks in the complex.
This, however, flopped and after being referred to an arbitral tribunal, Synergy was rewarded Sh1,666,118, 183 being a total of the principal amount and interest.
This was on January 30, 2015.
Cape Holdings, however, moved to the High Court challenging the arbitral award and on March 11, 2016, it was set aside.
Then, the court stated that the tribunal had determined issues beyond the scope of the terms of reference to arbitration.
In an attempt to have the award reinstated, Synergy moved to the Court of Appeal, but its prayers were dismissed on the grounds that there was no right of appeal under section 35 of the Arbitration Act.
This section provides grounds for setting aside an arbitral award.
The matter ultimately ended up in the Supreme Court and on December 19, 2019, the apex court directed the Court of Appeal to determine Synergy's prayers challenging the High Court's ruling.
At the time, Cape Holdings did not file for a cross-appeal or any notice to enable the appellate court to address issues beyond those raised by Synergy.
According to the Legal Information Institute (LLI), a cross-appeal is a request filed by an appellee requesting that a higher court review a decision made by a lower court.
Come November 6, 2020, the Court of Appeal gave its decision in favor of Synergy and set aside the High Court ruling, reinstating the arbitral award.
Cape Holdings was dissatisfied with the judgement and moved to file an appeal in the same court which was dismissed.
This led the company to the Supreme Court which also dismissed its application on December 8, 2021, on grounds that it did not raise any matters of general public importance to warrant certification.
Following this, on March 25, 2021, the High Court issued a decree for Sh4,497,776,260.35 (Sh4.5 billion) against Cape Holdings Limited and execution proceedings followed.
Synergy Industrial successfully obtained orders from the High Court to auction the complex to recover its money, which it now claimed to be more than Sh5.5 billion.
On January 5, 2022, the High Court also issued prohibitory orders against the 14 Riverside Drive that was registered against the title on January 14, 2022.
In April of the same year though, the Court of Appeal halted the sale plan after I&M Bank moved to court and said the property is charged to the lender over a loan of Sh2.82 billion.
Still determined to continue the fight, Cape Holdings changed its advocates and moved to the Court of Appeal to recall, review and set aside the judgement of November 6, 2020.
It urged the court to review the award arguing that it was not pleaded by the parties and that the arbitrator went beyond what was contemplated in the agreements.
Cape Holdings said the judgment occasioned a miscarriage of justice because it unjustly enriched Synergy Industrial Credit Limited by awarding a rate of interest that was unconscionable, punitive rather than compensatory, and contrary to public policy.
It also wanted the court to set aside the commercial rate of interest and replace it with interest at court rates of 12 per cent per annum with effect from January 20, 2015, and the same be computed to a limit of interest to six years.
Synergy Credit however opposed the application, saying it was the fourth attempt by Cape to set aside the arbitral award and none of the issues raised would justify the review of the decision.
It also submitted that the application was "moot" as the execution was completed and courts exist to resolve live disputes and not to give futile, hypothetical or abstract expositions of the law.
Upon determination, appellate judges Kathurima M’inoti, Fatuma Sichale and Jamila Mohammed said from the judgment issued on November 6, 2020, it was clear that the court deliberately declined to address the merits of the award because the parties had agreed that the issue would be exclusively dealt with by arbitration tribunal.
"So, it is a misnomer for the applicant to claim, as it does in its application, that this court erred in doing this or failing to do that, regarding the merits of the arbitral award," the judges said.
They further said the court could not entertain applications for review of its decisions on the allegation that it misinterpreted or misapplied the law, as that "would be the shortest and surest way to create an illegitimate tier of appeals against the decisions of the court".
"If the Supreme Court has no jurisdiction to entertain appeals from the Court of Appeal on the grounds that it misapplied the law, how can the Court of Appeal itself be asked to routinely review its decisions on the same ground?" the court wondered.
The judges noted that Cape Holdings did not dispute that the judgment it sought to recall or review had already been executed.
The Court of Appeal agreed with Synergy's counsel that there was no longer any live controversy and the application a mere academic exercise.
"The execution of the decree is complete, and we agree with the respondent (Synergy Industrial Credit) that this application is moot," the court said.
It dismissed the application to recall, review and set aside the judgement of November 6, 2020.