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Justices Overrule Favouring Ghion Hotel over Disputes with Filmmaker's Company

October 16 , 2021

Justices at the Supreme Court have ruled in favour of the Ghion Hotels Enterprise over litigation against a private company undertaking construction works inside one of Addis Abeba's most valued landmarks. A legal dispute between Ghion Hotels and Das Engineering & Innovation Plc took another turn last week as justices ruled that the Enterprise has legal grounds to appeal to lower courts.

A company co-founded by Tewodros Teshome, Das won a bid two years ago to lease approximately 5,000sqm of land inside Ghion Hotel on Ras Desta Damtew Street. It offered 400,000 Br in monthly fee to use the land to build a restaurant and cinema. Tewodros is a filmmaker best known for titles such as Qezqaza Welafen.

The agreement granted the company three rent-free months to complete construction and entitled Das to all proceeds from the restaurant and cinema for 10 years. Both sides had agreed for Ghion to assume full ownership of the properties upon the end of the contract period, while the rental fees would be reviewed by 25pc annually after the second year.

However, Das began the civil work in January 2020, several months later than the deadline stated in the contract. When the COVID-19 pandemic struck and a state of emergency was declared in April, the construction work was not completed. This led the Enterprise's management to issue a contract termination notice in August, alleging that Das had not paid six months' rent amounting to 2.4 million Br.

The company claimed it had no obligation to pay as a clause in the agreement exempted it from doing so in the case of a state of emergency. The company agreed to settle half the amount following a round of negotiations.

However, the Enterprise terminated the contract.

In February this year, Das took the case to the Federal High Court, claiming an unlawful breach of contract. Its lawyers argued their client was not under obligation to pay rent for the three months of the pandemic. They also charged the Enterprise defaulting on an agreement to let Das host a 12-day expo on the premises in January this year. The plaintiff claimed it had issued the Enterprise a four million Birr cheque to host the event in the hotel compound but later blocked the payment.

Ghion's legal representatives submitted a plea for the suspension of the construction project and appealed to judges to order Das to unblock the cheque.

Judges at the High Court ruled that the construction works have no relation to the litigation and rejected the Enterprise's appeal for unblocking the cheque. Ghion's lawyers took the case to the Supreme Court in an appeal.

Justices Mustefa Ahmed, Be'ewket Belay, and Lelissa Desalegn overturned the High Court last week, paving the way for Ghion's legal team to appeal against the construction project underway by Das.

The Federal High Court second civil bench has adjourned the case for November 1, 2021, to hear arguments from both sides.

PUBLISHED ON Oct 16,2021 [ VOL 22 , NO 1120]

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