GOVERNMENT’S obligation to pay approximately $70 million to hotelier John Sinclair was Thursday put on hold by the local appellate court which, in addition to granting a stay to state lawyers, granted them leave to apply to the Privy Council in England.

Sinclair first became entitled to the $70 million on July 18, 1997 when Supreme Court Judge Lloyd Ellis ruled that the now defunct Century National Bank (CNB), which was taken over by the Government through its Financial Institutions Services (FIS) Limited, had no right to charge compound interest on monies that Sinclair borrowed through three overdraft accounts to finance various hotel-building projects.

Justice Ellis’ decision was affirmed last month by two of the three local appellate court judges that heard the Government’s appeal against it.

The judges, namely justices Ransford Langrin and Paul Harrison, ruled that FIS was liable to refund approximately $70 million with interest at 52 per cent per annum to Sinclair’s two companies, Negril Holdings and Negril Investments Limited. The interest rate was to be applied from September 30, 1992 when the suit was filed to the date of Justice Ellis’ judgement.

Justice Henderson Dower, who also heard the appeal, dissented, pointing out that Sinclair had pursued a reckless policy of borrowing by way of overdraft and that the interest rates charged by CNB were in keeping with the usual rates justified by settled authorities on the subject.

Thursday, when lawyers from the attorney-general’s department appeared before justices Ian Forte, Paul Harrison and Neville Clarke, they obtained a stay of execution of the order to pay, as well as leave to challenge the decision at the Judicial Committee of United Kingdom Privy Council, Jamaica’s highest legal authority.

When the case come up before the English Law Lords they will be asked to decide whether the Donovon Crawford-led Century National Bank had illegally and oppressively compounded interest rates on monies that Sinclair borrowed. They contended that Crawford took advantage of his non-fiduciary relationship with Sinclair before making a formal demand on him to repay the monies borrowed or forfeit his hotels.

In the meantime, the Government is to stand Sinclair’s legal costs on the understanding that his lawyers will refund that money if the Privy Council rules against him.

FIS is also to go ahead with the court’s order to render proper account of the current accounts that Sinclair had opened with CNB on November 15, 1984; December 4, 1986 and July 13, 1987, as it is those records which will form the basis of a refund to Sinclair if necessary.