Attorney General Cajeton Hood said today, Tuesday, that the owners of Capital Bank will have to prove the damages that were done to the bank, before any form of compensation is provided in accordance with a recent OECS Court of Appeal Judgement.
A recent judgement from the Court of Appeal said that the Government of Grenada is to compensate the owners of Capital Bank International (CapBank) for what it says was the improper application of Section 45 of the Banking Act, as that section does not create an “exclusive remedy” when it [CapBank], was originally placed into receivership.
Hood said that Appeal Judges agreed with the owners of the bank, that based on the laws of the Banking Act, it was only the Eastern Caribbean Central Bank which had the authority to go to the court seeking its consent to place the bank into receivership.
In February 2008, the Grenada High Court ordered that the bank be placed into receivership as a result of an application by the then Finance Minister Dr Keith Mitchell. This was as a result of months of complaints from depositors who were having difficulties withdrawing their funds. CapBank was never a member of the ECCB during its operations.
Hood said that besides proving the damages to the bank through affidavit and other court documents the issue of compensation can also be resolved through mediation or arbitration. “It’s a long and tedious process before it is final settled,” he advised.
However, Legal Affairs Minister Elvin Nimrod said, “Government will give consideration to anything that will bring closure to this matter.”
The judgement said that Section 45 of the Banking Act does not create an “exclusive remedy” in the sense that the bank is precluded from seeking and being granted other relief, where a case for such relief has been made out,” said the judgement dated 17 June, and published on the Court of Appeal website on 30 June.
By Linda Straker