Nairobi court dismisses 18-year-old Grand (Laico) Regency case

An 18-year-old legal battle over controversial sale of the multi-billion shilling Grand Regency Hotel (Laico Regency) has been dismissed two decades after the matter came into the limelight.

The long-drawn fight for Sh318 million compensation claim, saw 10 judges handle the case involving the Central Bank of Kenya (CBK), Westmont Holdings, Uhuru Highway Development and businessman Kamlesh Pattni.

Yesterday, High Court Judge, Justice Richard Mwongo dismissed the suit that Westmont Holdings, a local subsidiary of Malaysia-based Lynwood Development, was claiming $3.7 million (Sh325 million) it allegedly paid the CBK in 1997 as 10 per cent deposit for the purchase of the hotel.

“It is clear from the records that CBK did not enter into agreement with Westmont Holdings but with Pattni as an individual since it was not a tripartite agreement,” the judge ruled. During the proceedings, CBK disputed the suit and filed a counter claim against the company. Pattni, the former owner of the hotel, said the amount had been settled and wanted to be left out of the dispute.

The bank, through lawyer Philip Murgor, wanted the court to dismiss the case, arguing that the businessman had paid the money to reduce his liability as per the agreement he signed with the government in May 1997.

The CBK challenged Lynwood’s claim, arguing that Pattni paid money to offset a loan he owed the regulator, setting the stage for a legal battle that could have cost taxpayers millions of shillings.

Westmont Holdings moved to court in 1998 seeking a refund of the money it allegedly paid as deposit for the hotel but the case was dismissed in 2002.

In 2013, the Malaysian firm sought to reinstate the case, arguing that the delay was caused by unforeseen circumstances.

However, Lady Justice Jacqueline Kamau dismissed the application forcing the company to move to the Court of Appeal before the matter returned to the High Court where it was finally concluded.