As a result, Roy deCambre and his company Cubana Distributors Trading Limited are taking the Bank of Nova Scotia to the commercial division of the Supreme Court, seeking millions of dollars in compensatory damages for closing the company’s account without due notice.
Cubana Distributors, which established its Razz Brewery in 2012, opened an overdraft facility with the Bank of Nova Scotia some time in about December 2012, according to the particulars of the claim.
Then in about April 2013 the relationship deepened, when Cubana Distributors submitted a business plan to the bank that proposed the bank provide loans and banking facilities to refurbish and establish a restaurant called Portofino in Kingston as well as a restaurant/lounge called XS Lounge at the Post Office Mall in Liguanea, Kingston, the claim says.
“The defendant agreed to grant various banking facilities in the form of loans, overdraft facilities and two credit card machines which would be installed at both locations,” the claim states.
Security for the facilities was guaranteed by eight mortgages lodged against property owned by deCambre at Shortridge in the Barbican area of Kingston. “The mortgage property boasts a mansion, which was the family home of the owner/managing director and the second claimant herein for some 20 years and upwards, which was built by him and it is where he and his then wife raised their daughter,” the claim document states
“At all material times it was agreed and understood that all the banking facilities were absolutely necessary in order to carry on the successful establishment and operations of the business,” according to the claim document.
But the smooth operating of the businesses was not to be.
“Without notice, in or about June 2013, mere weeks after the restaurant and lounge had commenced operations, and despite the agreement with the first claimant, the defendant unilaterally disconnected the credit card machines, froze the accounts of the first claimant depriving it of the use and benefits therefrom,” the claim document says.
In a letter to the bank, DeCambre stated that during an earlier meeting, he was informed by the bank that it was subject to sanctions by the US government for facilitating trade with a terrorist state — Cuba, via the facilities granted to Cubana Distributors Trading Limited.
In the letter, deCambre stated that the bank told him the enquiry was a result of a Bank of Nova Scotia US cheque/draft he had purchased from their head office in downtown Kingston of some US$500, which was cleared through the bank’s corresponding US bank.
He said the name Cubana Distributors had raised a “red flag” and had been reported to the US authorities who threatened BNS with a fine of some US$500,000 per day for facilitating deCambre.
He stated that as a result of the closing of his account, both businesses had to be closed. The accounts also accumulated interest charges and were classified by the bank as a bad debt and the loan called, deCambre said in the letter to BNS. The debt was repaid in full along with the overdraft to the tune of some $35 million in or around October 2014, deCambre said.
“At all material times the name of the parent company was never an issue in relation to any of the dealings with the Defendant,” the claim document says, noting that cheque books were issued in the name of the company and not in the name of deCambre.
But in a letter of reply from BNS, the bank denied being in any way responsible.
“We feel that the obligation to select a name that does not hinder you in accessing the banking services you require is entirely yours,” said a lawyer for Scotiabank in a letter to Cubana Distributors.
“We deny being in any way responsible for any difficulty encountered by you resulting from your selection of “Cubana” as part of your name or for any other reason not attributable to us,” the BNS letter stated.
Razz brewery’s Jamaican Stout has won three awards, including a gold medal in 2011 from the Beverage Tasting Institute, a gold medal in 2012 from the Los Angeles International Beer Competition, and a silver medal also in 2012 from the San Diego International Beer Festival.