The Zanzibar High Court has blocked the decision to auction Bwawani Hotel after the Isles government presented a petition to settle its debt worth 1.6 trillion outside the court.
Speaking to this paper on Friday, the High Court Registrar Yesaya Kayange said the hotel’s auction was scheduled to take place on January 26 this year, but the High Court halted the decision after the respondent, the Ministry of Finance and Economic Affairs pleaded to settle the matter out of court.
“We received a request from the respondents asking us to halt the auction because they were ready to settle the matter out of court,” said the registrar.
However, Kayange said should the parties fail to reach an understanding, the matter would revert to court.
He noted that for now the court would not interfere because it had awarded both the parties time to settle the matter.
The court had authorized the auction of the hotel following the Zanzibar Ministry of Finance and Economics’ failure to pay a debt of 1.6trn/- to Leamthore Rice Company Ltd which had been awarded tender to supply rice to the government.
The order was issued on November 12 last year by the same registrar to execute a judgment that was delivered by high Court Judge Wolfgang Dourado on May 16, 1997.
Earlier, the company had filed a civil case no. 47/1997 following the governments failure to pay a debt of USD 69.4m after receiving rice from the same company and selling it in the local markets.
The company was being represented by advocate Dr Masumbuko Lamwai who had asked the court to order confiscation of government properties including a farm in Kijichi area.
Judge Dourado reached the decision following failure by the ministry’s permanent secretary Omar Sheha to appear in court.
The court then ordered the ministry to pay the debt in full including an interest of 25 per cent and the costs of the case.
However the ministry failed to pay the debt on time which accumulated to 1.6trn/-.
Bwawani Hotel was built by the first phase President, the late Abeid Amani Karume, and reports show that high profile businessmen from the Isles and Tanzania Mainland had shown interest in buying the hotel.