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Commercial Bank of Ethiopia (CBE) has sued Lion
Insurance SC for a little over three million Birr
over an alleged insurance policy for natural
disaster damage to a property Anano General Trading
Plc acquired with a loan from the bank, which it
failed to pay.
The dispute arose when Anano took a mortgage on its
animal fattening company from CBE, which registered
a record gross profit of 2.8 billion Br in the
2009/10 fiscal year.
The animal fattening company, located on a 50,000ht
plot located in Metahara Town, Oromia Regional
State, was insured against incidents of fire,
earthquakes, wind, lightning and rain storms, as
well as floods for 3.2 million Br during the 2008/09
and 2009/10 fiscal years, read the charge filed at
the Federal High Court, Ninth Civil Bench on March
10, 2011.
However, the debtor, Anano, did not pay its debts to
the bank, which is authorised, in that case, to sell
the mortgage, claimed Yosef Kewiye, lawyer for CBE,
which has cut down its nonperforming loans (NPLs) to
1.7pc of its total loans and advances from 3.9pc in
the previous fiscal year.
It also claimed to have visited the animal fattening
company during the 2009/10 fiscal year to evaluate
the property and take pictures of the facilities
along with wereda officials and police officers.
However, the facilities had been destroyed by floods
at the time, it alleged.
Lion Insurance, which was established with a capital
of a little over 16 million Br in 2007, was notified
in writing of these facts by CBE within five days of
the latter learning them, it claimed. Following this
initial notice, the insurance company, was notified
other two times, the plaintiff alleged.
On February 12, 2011, the insurer contested that the
company the CBE employees claimed to have visited
was not the company owned by Anano General Trading
Plc.
However, the bank employees have confirmed that the
destroyed facilities belong to the debtor, the
charge read.
CBE, which attached 43 pages of documentary evidence
and 10 witnesses to their case, is demanding that
the insurer pay the amount owed by Anano, including
damages for the period in which the bank was not
paid.
Lion Insurance was ordered to submit a response to
the charges to the registrar’s office by April 4,
2011, by Ayeshesume Melese, the presiding judge, who
adjourned the hearing to April 11. |
