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Kenya: Buyers Drove a Hard Bargain On Hotel
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The Nation (Nairobi)
3 July 2008
Posted to the web 3 July 2008
Kenneth Ogosia
Nairobi
The speedy transfer of the Grand Regency Hotel was part of the sale agreement between the Central Bank of Kenya and the Libyan firm which bought the property.
"The purchasers' advocates shall within seven days of completion date and receipt of completion documents present the instrument of transfer for registration, time being of essence," the agreement states.
Accept terms
The Libya Arab African Investment Company Kenya Limited pushed the CBK to accept all its terms and conditions and bank governor Njuguna Ndung'u and secretary Kennedy Kaunda Abuga signed the papers on May 5, 2008.
"The CBK hereby covenants with the purchaser that it will seal, execute, issue and deliver such deeds and documents and do such acts and things as the purchaser may from time to time require for the purpose of enabling the purchaser to obtain registration of the instrument of transfer in the name of the purchaser or its nominee," the agreement dictates.
Among other tough conditions, the agreement states: "If after the completion the instrument of transfer cannot be registered within 90 days from the completion date the purchaser shall be entitled upon serving 21 days notice in writing to CBK to terminate this agreement."
The agreement, however says terms can be renegotiated if they are unfavourable to any party.
"If any term or condition of this agreement shall, to any extent, be found or held to be invalid or unenforceable, the parties shall negotiate to amend such term or condition so as to be valid and enforceable and to be construed in the interest of the parties concerned herein," it says.
As it stands
The agreement attached special conditions in the Libyans' favour that "the purchaser may undertake a survey of the property at its cost and the Central Bank of Kenya hereby grants the purchaser and their authorised agents access to the property to enable them undertake a survey as aforesaid."
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It further removes all the rights from CBK with a doubled-edged rider: "The purchaser has inspected the property and purchases it with full knowledge of its actual state and condition and shall take the property as it stands and shall not require the CBK to repair, remove, decorate or improve the same in any manner."
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