Key Motors battles automaker Hyundai over $80m debt
A uto dealer Key Motors Limited has been granted a months-long stay of execution of judgments against it that emanated from arbitration proceedings in South Korea over debt owed to Hyundai Motor Company. The Court of Appeal granted the stay on...
A uto dealer Key Motors Limited has been granted a months-long stay of execution of judgments against it that emanated from arbitration proceedings in South Korea over debt owed to Hyundai Motor Company.
The Court of Appeal granted the stay on condition that Key Motors pay $20 million either into an interest-bearing account in the joint names of lawyers for both parties or into court, pending the outcome of the substantive appeal to be heard in or around the last quarter of 2021.
The auto company acted as distributor for Hyundai vehicles in Jamaica up to five to six years ago, when the contract was taken over by Magna Motors.
Attorney Ransford Braham, QC, who is representing Key Motors, has so far not responded to Financial Gleaner queries as to whether the auto company is contemplating any other legal moves before the appeal is heard.
Appellate Justice Patrick Brooks, who made the order following an in-chamber hearing recently, noted that Key Motors made an application seeking a stay of execution of two judgments made last year by Justice Kissock Laing in the Supreme Court on September 23 and November 2.
Those judgments cleared the way for Hyundai Motor Company to enforce a debt of $80 million, but is on hold pending the results of the appeal. Key argued that its appeal stood a good chance of succeeding and that paying out such a large sum would ruin its business. The Jamaican company also argued for the stay on the basis that were it to win at appeal, it would face substantial difficulty recovering the funds from Hyundai, which is based in South Korea.
Following Justice Laing’s ruling, last year, Hyundai commissioned the Supreme Court’s bailiff to execute the judgment. The bailiff estimated the value of vehicles belonging to Key Motors at approximately $20 million – an amount equivalent to which Justice Brooks ordered to be paid into escrow, having stayed the further execution of Justice Laing’s order.
The bailiff of the Supreme Court was given the go-ahead to complete the disposal of the goods owned by Key Motors that were marked for seizure and sale, and to pay over the net proceeds.
Attorney for Hyundai Amanda Montague argued that granting Key Motors time to challenge the lower court’s order would only exacerbate its claimed dire financial situation and cause Hyundai greater loss.
Justice Brooks noted that Hyundai deserved some protection as he set the hearing date.
“Of concern is the fact that the vehicles that have been seized will only deteriorate if their present situation continues for a period of months,” he said, while noting that the appeals would be set for September and October of this year at the earliest.