The High Court of Kenya has terminated the administration of Infinity Industrial Park Limited by Bank of Baroda Kenya Limited. The court found that the bank 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 joint administrators made by the bank in August 2026.
The dispute arose after Bank of Baroda appointed administrators following a demand for payment of an alleged debt of about Sh2.07 billion owed by Infinity Industrial Park. However, 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, which had not yet been quantified through formal proof. This meant that the extent of the company's claim against the bank remained to be determined. Justice Mugambi observed that Infinity had a pending claim against the bank arising from the same banking relationship.
The judge held that an insolvency debt 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. 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 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.
Consequently, the court ordered the administrators to immediately return all company property and records they had taken. 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.
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 favor 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.
Key points
- The Kenyan High Court terminated Bank of Baroda's administration of Infinity Industrial Park due to improper invocation of insolvency powers.
- The court found that the bank's claim and Infinity's cross-claim arose from the same banking relationship, making it premature to invoke insolvency powers.
- Bank of Baroda was ordered to bear the costs of the application and restoration expenses.
