MOHAN GALOT 30 YEAR COURT CHAINS FINALLY BROKEN.

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City Tycoon Mohan Galot./PHOTO BY S.A.N.

BY SAM ALFAN

For 30 years, businessman Mohan Galot’s of Manchester outfitters was afflicted by the plague of court battles.

He can now breathe a sigh of relief following a court of appeal judgement that rested the case to the abyss.

The city tycoon finally won the 30-year-old court battle against Standard Chartered Bank that brought most of his businesses to a stand still.

His business had borrowed a loan in March 1982 from the Standard Chattered Bank of 1,300,000 Deutsche Marks and 1,050,000 Swiss Francs.

The Court of Appeal found that the lender was wrong in appointing receiver managers to run his business over a loan in 1990.

Appellate Court Judges Justice Sankale ole Kantai, Asike Makhandia and Pauline Nyamweya faulted the lender for appointing A.D. Gregory and C.D. Cahill as managers in September 1990 to run Manchester Outfitters Ltd (now known as King Woolen Mills Ltd) and Galot Industries.

The court allowed the appeal, adding that the notices for grounds affirming the decision have no merit and we’re dismissed.

“I have found that there was no instrument that allowed 1st repsondent (Standard Chartered) to exercise any powers over appellant (Manchester outfitters (suiting division) limited now called King woolen Mills ltd and Galot Industries ltd); the 1st respondent had no powers to appoint the 2rd respondent (A.D. Gregory and C.D. Cahill )as receiver or manager,” said judges in their decision.

The Appeals court also referred the case to the High Court to assess and award damages.

Justice Sankale ole Kantai said the charge by the lender had to be executed, stamped and registered at the Registry of Lands to have legal effect and there was a provision in the Act on how that charge would be discharged upon repayment of the sum secured.

Judges added that document stated in clear terms that it superseded all previous agreements in respect of the facility offered and that it contained the entire agreement between the parties.

The judge said the appointment of the receivers to manage the affairs of King Woolen Mills was illegal, null and void.

Evidence presented in court was that the lender was carrying financing industries and providing other financial facilities but had not had a customer relationship with the Galots’ firm.

Tycoon Galot through lawyer Philip Nyachoti said the debenture ceased to be operational when the foreign currency loan was converted to a loan in Kenya (local) currency.

Lawyer Nyachoti told the appellate court that the foreign currency loan was terminated in October 1986 and the charge and the debenture offered as security for those loans ceased to have any legal effect .

According to lawyer Nyachoti, the money advanced by Standard Chartered Financial Services to Manchester and Galot was through a separate distinct arrangements , different from the foreign currency loan agreement.

“For the local loan to be secured security documents (charge and debenture ) had to be executed and registered as required in law;they not having been stamped or registered they were of no legal effect and we’re invalid,” lawyer Nyachoti told the three Judge bench.

Bank had claimed that no security had been offered by the appellant for the foreign currency loan.

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