The Government of Grenada is to compensate the owners of Capital Bank International for what an OECS Court of Appeal judgment says was the improper application of section 45 of the Banking Act; as that section does not create an “exclusive remedy” when it was originally placed into receivership.
“I conclude that section 45 of the 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 judgment which is dated 17 June. “It is hereby declared and ordered as follows:
(1) The appeal is allowed. Section 45 of the Act does not create an exclusive remedy in the sense that the Bank is precluded from pursuing and being granted other relief by the court.
(2) The order dated 23rd September 2010 refusing the application for permission to enter default judgment is set aside and the matter is remitted to the court below to take its course in accordance with the rules of the Court.
(3) The respondents shall bear the appellant’s costs of this appeal to be assessed unless agreed within twenty one days,” said the judgment which was posted on the OECS Court of Appeal website on June 30th.
One lawyer, after reading the judgment, said that the expenses of the entire process up to the Court of Appeal will be evaluated and must be paid by the Government of Grenada. “While the High Court must now begin the process of assessing the damage done to Cap Bank by the first receivership entered on February 15 2008, and this will no doubt affect the Government’s position regarding the second receivership which was done in October 2008 and has not been settled as yet,” the legal luminary explained.
This appeal is yet another, flowing from the appointment of a receiver on 15 February 2008 on the Bank. The essential issue raised in this appeal is whether the revocation of a receiver’s appointment is the sole or exclusive remedy available to a financial institution where a receiver has been appointed under section 43 of the Banking Act of Grenada.
In February 2008, the 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.
by Linda Straker
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