The order of the Supreme Court’s Cassation Bench has forced the Lideta Federal High Court to suspend its nearly closed trial of Intercontinental Hotels Corporation, filed against G.H Tsemex Plc and Semachew Kebede, general manager of Intercontinental Addis Ababa Hotel, over unlawful use of trade name.
Semachew Kebede is the owner of Tsemex and Intercontinental Addis Ababa Hotel, which is located at Kazanchis on a 2400 square meters of land.
The lawsuit arose on March 29, 2013, as Intercontinental Hotels Corporation brought a claim against both Tsemex and Semachew Kebede for attaining unlawful enrichment using a trade name, which was exclusively registered by the plaintiff at the former Ministry of Trade & Industry on October 2, 2001, and renewed by the Intellectual Property Office (IPO) on October 1, 2013.
Intercontinental Hotels Corporation charged the defendants by claiming that they had deceived the IPO and acquired a certificate bearing its trade name, Intercontinental Addis Ababa Hotel, from Akaki Kaliti Trade & Industry Development Agency. By misleading customers, they had earned unlawful profit since their establishment in 2006 and could not stop their unlawful act, despite repeated warnings from the plaintiff and the State Minister at the Ministry of Justice, Birhanu Tsgaye, the Corporation claimed. According to the plaintiff’s statement of claim, the defendants accepted the warnings by requesting one year to discontinue using the name. However, they did not keep their promise.
Saying that it was represented by an agent for the registration of its trade name in Ethiopia, the plaintiff, a corporation which renders hotel service, hotel consultancy, construction as well as planning service to third parties, provided evidence to the Higher Court that it is a corporation registered by such trade name at the United States, Atlanta, Georgia, Rabin Drab District.
Providing documentary evidence of its ownership, Intercontinental Hotels Corporation requested the Court to pass an embargo on the utilisation of its name by the defendants’ hotel as well as their website. It had asked the Court to order the cancellation of the certificate given by the Agency as well as the calculation and refund of the unlawful profits obtained by the defendant since 2006.
The defendants came up with preliminary objections that Intercontinental Hotels Corporation had no legal personality to sue and that although it is said to have such right, it had lapsed the statute of limitations for suing after five years. They requested the omission of Semachew from the lawsuit reminding the court that he should not be part of the litigation personally because the indicted hotel has its own legal personality.
The defendant argued that the trade name for the international hotel, registered as Intercontinental Hotels & Resorts, is egg-shaped. However, it added, the local registration is just as Intercontinental Hotel, and it uses a rectangular shape.
Entering into the substance, the defendants stated that they did not violate the plaintiff’s ownership right because the name was given by the agency after ensuring a response from the then Ministry of Trade & Industry on August 21, 2006; hence, the trade name was not registered by the name of another venture.
However, the Lideta Federal High Court did not even arrive at examining the substance of the lawsuit and rejected the case at this preliminary stage by saying that Intercontinental Hotels Corporation did not have the legal personality to sue.
Disappointed by such decision, Intercontinental Hotels Corporation appealed to the Supreme Court on February 28, 2014. The respondent objected the appeal saying that the applicant had no evidence of its legal personality locally, and is unregistered by proclamation number 501/98. Citing Article Two, Sub Article Four of the proclamation, which says that the law does not recognise state entities which obtain legal personality abroad and that to obtain a legal personality, they must be registered locally.
The respondent also came up with its own cross appeal saying that the High Court declined to pass decisions on its other preliminary objections such as the lapse of period of limitation.
The Supreme Court framed two issues for decision, namely, whether the High Court’s ruling that Intercontinental Hotels Corporation lacks legal personality and whether the High Court had to pass a ruling on the other preliminary objections of the respondent.
For the first issue it remarked that the High Court’s decision was groundless. The Supreme Court said the High Court should have presumed that the trade name, Intercontinental Hotels Corporation, could not have been registered by IPO without having legal personality. It also condemned the High Court’s remark that the applicant had no evidence for legal personality, while the applicant had showed evidence of its registration abroad and locally.
Despite this, the Supreme Court did not accept the respondent’s cross appeal by saying that once the High Court rejected the case on one of the objections, it was not obliged to pass a decision on the other objections.
Thus the Supreme Court reversed the High Court’s ground of rejecting the applicant’s claim and sends back the case to be seen again by the High Court. Following the decision of the Supreme Court, the High Court examined the case again and had appointed the parties for a ruling on March 18, 2015. Nevertheless, the Cassation Bench of the Supreme Court ordered the High Court to suspend the ruling until it examined the case, after hearing the respondent’s appeal.