The High Court has terminated the administration of Infinity Industrial Park Limited after finding that Bank of Baroda Kenya Limited improperly invoked insolvency powers while a separate dispute over the bank’s alleged debt was still pending.
Justice Freda Mugambi set aside the appointment of the joint administrators, who had been appointed by the bank in August 2026.
“The purported administration, undertaken immediately following the ruling delivered on 31st July 2026 in HCCOMM/E322/2024, constituted and/or amounted to an improper and collateral invocation of statutory insolvency powers, and was inconsistent with the objects and purposes of administration under the Insolvency Act,” the judge observed.
The dispute arose after the bank appointed the administrators following a demand for payment of an alleged debt of about Sh2.07 billion owed by Infinity Industrial Park.
Infinity’s directors and shareholders challenged the appointment, arguing that the bank had invoked the insolvency process despite an ongoing court dispute in which the company had a claim against the bank.
The court noted that Infinity had obtained a judgment against Bank of Baroda in separate proceedings. The judgment had not yet been quantified through formal proof, meaning the extent of the company’s claim against the bank remained to be determined.
Justice Mugambi noted that Infinity had a pending claim against the bank arising from the same banking relationship, which had yet to be quantified through formal proof.
“An insolvency debt therefore must be one that is due and ascertained, and not premature. A debt is premature where its existence or its net amount depends on the outcome of pending proceedings between the same parties. That is the position here,” the judge held.
The court found that until the competing claims were quantified, it could not properly be established that Infinity owed the bank a net amount or that the company was unable to pay its debts.
The judge further observed that both the bank’s claim and Infinity’s cross-claim arose from the same banking relationship, including the facilities and security arrangements between the parties.
She held that insolvency proceedings should not be used to enforce a substantially disputed or uncrystallised debt where there is a genuine and potentially substantial cross-claim.
The court also questioned the timing of the administration, noting that the bank moved to appoint administrators barely 10 days after losing its attempt to reopen the judgment entered against it.
Justice Mugambi said there was no evidence before the court of asset dissipation or other urgency that would have justified the immediate intervention through administration.
That administration, she observed, has significant consequences for a company because it displaces its directors and gives administrators control over its assets, records, bank accounts and contracts.
Consequently, the court ordered the administrators to immediately return all company property and records they had taken.
“The 2nd and 3rd Respondents (administrators) be and are hereby ordered forthwith to return every title deed, lease, logbook, record, key, device, password, company seal, statutory register, bank mandate, contractual document, physical asset, money and other property taken pursuant to the purported appointment,” she ruled.
The Registrar of Companies, Official Receiver and relevant registries and public authorities were also directed to rectify, or amend entries indicating that Infinity Industrial Park was under administration.
The court further issued permanent prohibitory and mandatory orders restraining the administrators from continuing, implementing or relying on the impugned appointment and requiring restoration of the company’s property, rights, management and control.
Bank of Baroda was ordered to bear the costs of the application, the purported administration and reasonable restoration expenses.
The orders come as Bank of Baroda faces enforcement of a Sh2.996 billion judgment in favour of Infinity Industrial Park, with the 15-day notice period set to lapse on October 1 if the bank fails to pay the judgment debt.
Earlier this month, the High Court issued a warrant authorising Moran Auctioneers to attach the bank’s movable and attachable assets, with the property liable for public auction if the amount remains unpaid.
The auctioneer was required to issue the notice before any sale and report back to the court by October 15, 2026.
