Access Real Estate, Laura Industries at Loggerheads Again
The troubled Access Real Estate (ARE), for the first time in years has got good news from the Supreme Court. The Court has overridden the High court’s decision that had granted Laura Trade and Industries the 65pc of the completed three four storey buildings at the Nyala Motors site.
It was a year ago that the High Court decided to terminate the real estate development contract between the parties.
Laura opened a case requesting for alternative solutions – for Access to act upon the contract or for the contract to be cancelled. Access Real Estate S.C. (ARE), a company at the centre of the real estate development sector evolution and controversy in the country was founded in 2008 with 50,000 br capital. Ermias T. Amelga, the mastermind behind the company, ended up creating partnership with various other companies among which Laura Industries and trade was one.
In the agreement that twins the two, Laura contributes in kind- land holding lease right , while Access covers all other costs. Laura in return will have ownership of 11 apartment homes, among the 96 flats planned to be constructed and sold.
The two parties had agreed in June 2010 for ARE to cover all costs related with land lease obligations, construction and any related costs. It was also part of the agreement that Laura will be entitled to own 11 apartments out of the 96 designed to be built.
Access at the point counter argued that both requests should be dropped.
“It is practically an impossibility to cancel the contract, which in effect will put Access out of the equation fully, unfairly enriching Laura,” Access argued.
Federal high court upon investigating the situation on the ground with the help of experts asserted that the construction was 65pc completed.
Yet it has decided to cancel the contract leaving Laura with the right to enjoy the construction, since it is the legal lease right holder of the plot. ARE’s right to reclaim the cost incurred was reserved.
It was this ruling that Access was not ready to accept and appealed against to the higher court- Supreme Court, and got the positive ruling.
Two major flaws were cited in reversing the lower court’s ruling.
“Without official declaration of Bankruptcy it was wrong for a bench to assume incapacity of a company to continue its operations,” the ruling reads.
High court’s judgment was also criticised for interpreting the land lease proclamation’s provision out of context. Imposing the time frame set for using a leased plot on individual contract without time frame was also rejected.
The three judges, however did not go in depth in resolving the substance, but ordered the lower court to look into the case again.
Back in High Court the two parties will face each other again. The court will have to decide on the potential options that Access can finalize the contract.
This is the first time Access Real Estate has scored a victory in any court despite having many cases in litigation.
“We are so happy and hopeful of the outcome,” Abraham Alemayehu ( Col.), CEO of ARES.C, told Fortune.
He further said that the company is working on alternative workable modalities.
Five years since establishment and a year more after Access promised to deliver homes, the company is still far from a concrete solution.
Its assets and properties are all ceased, a homebuyer Fortune talked to is not as optimistic as the CEO.
“It is much more complicated than a single court ruling,” said the homebuyer active in the homebuyers committee.
The good news for Access came just when homebuyers’ sub-committee of the Laura site opened charges against the two companies- Laura Trade and Industries, and Access.
The two companies jointly have signed contract of sale of each apartments, making both jointly liable to carryout the duties.
This does not fully align with the general understanding the main homebuyers committee voiced months ago.
“Such piecemeal steps would not take anyone any further, the concerted effort had gained attention and now back to square one,” a member of the homebuyers committee commented.
The active engagement of the two committees assigned by the Prime Minister to follow up the situation along with the homebuyers committee went on for a year, until the former CEO Ermias T. Amelga was put under arrest.
“It has been almost three months since we heard from the government assigned technical committee,” a member told Fortune on promise of anonymity.
While the huge sectoral hurdle is strong, the focus has been on the one individual, under arrest since the second week of January. Ermias is now on bail following up more than one cases pending at high court.