Dashen Bank ordered to back off from illegal action

Appeals to reverse court order

By Dawit Ketema

Dashen Bank is at loggerhead with Awash International Bank in its attempt to evict the later from Tana Department Store. Dashen has appealed against a court warning issued against it earlier this Ethiopian year.
In August 2000 the previous owner of the department store building, National Trading Plc and sister company to Bekele Mola, rented office space to Awash, which eventually became the bank’s branch in Merkato. The department store is located at the core of the largest open market in Africa.
National Trading rented to Awash Bank the 353 m2 at a price of 70 Birr per m2 with amounting to 24,698 Birr per month. The five-year lease was signed in August 2000.
Meanwhile, since National Trading failed to service the loan it took out from the Commercial Bank of Ethiopia to purchase the building, Tana Department Store was foreclosed and sold in an auctioned by CBE in April 2002. Dashen Bank won the auction and acquired the building, becoming the legitimate owner.
The new landlord Dashen Bank immediately set its own rules and notified occupants of the building including Awash to enter into a new contract with it or vacate. In July 2003, upon the refusal of Awash, Dashen cut electricity supply to Awash Bank and denied it free parking to its customers, thereby, effectively disruppting the banks operations at its Tana Branch.
Awash filed a lawsuit at the Federal First Instance Court right away on charges of illegal acts whereby the court issued a temporary injunction ordering Dashen Bank to restore electricity to Awash until the court litigation is settled.
Dashen on its part pleaded to the court that the plaintiff has never settled any bills and that it [Dashen] had been paying all the electricity bills. "Awash is attempting to remain in the premise without paying any bills. Since Awash refused to renegotiate its contract with us like other tenants, the proprietor made a legitimate decision," Dashen justified its action.
The court citing article 2932 (1) of the Ethiopian Civil Code decided that the lessee’s right remains intact for the life of the contract upon the transfer of ownership of an immovable property (building) to a third party. Even though Dashen's may have felt aggrieved by the situation it should have proceeded through a court of law and not take matters into its own hands, the court said.
The court held Dashen responsible for unlawful acts and ordered the release of electricity lines as well as reinstate free parking service; as per the original contract with National Trading.
Dashen disagrees with the ruling and appealing to at the Federal High Court.
Dashen's Public Relations office refused to comment on the matter