The High Court of Kenya has terminated Bank of Baroda's administration of Infinity Industrial Park, following a ruling by Justice Freda Mugambi. The court found that the lender had improperly invoked insolvency powers amid a pending multibillion-shilling dispute. This decision was made after Justice Mugambi set aside, annulled, and terminated the appointment of joint administrators Ponangipalli Venkata Ramana Rao and Swaroop Rao Ponangipalli.
According to the court, the administration was instituted when the bank's alleged debt was not yet sufficiently ascertained. This is because Infinity Industrial Park had a subsisting judgment against the bank in a related commercial dispute. The judge ruled that the purported administration constituted an improper and collateral invocation of statutory insolvency powers, inconsistent with the objects and purposes of administration under the Insolvency Act.
The dispute between Bank of Baroda and Infinity Industrial Park centers around the bank's alleged claim of Sh2.070 billion against Infinity Industrial Park. However, Infinity Industrial Park had obtained a default judgment against the bank on September 8, 2025, which the bank attempted to set aside. The bank's attempt was dismissed on July 31, 2026. The judge noted that Infinity's claim against the bank could ultimately equal or exceed the amount the bank claimed from Infinity.
The court also questioned the timing of the bank's move to appoint administrators, barely 10 days after losing its bid to reopen the judgment. The judge stated that there was no evidence to suggest that Infinity's assets were being dissipated or that some urgency required the bank to act before the parties' respective positions were established. As a result, the judge concluded that the administration was not warranted at the time.
The judge ordered the administrators to immediately return all property and records taken from Infinity Industrial Park, including title deeds, leases, logbooks, records, keys, devices, passwords, company seals, statutory registers, bank mandates, and contractual documents. The judge also permanently restrained the respondents from continuing, implementing, or relying on the impugned administration and ordered the restoration of Infinity's property, rights, management, and control.
Separately, Bank of Baroda is already facing execution of a Sh2.996 billion decree issued in favor of Infinity Industrial Park. A warrant issued on September 15 directed Moran Auctioneers to attach the bank's movable and attachable property and sell it by public auction. The warrant requires the auctioneer to return to court by October 15, 2026, showing how it was executed or explaining why it was not.
The nullification of Bank of Baroda's administration of Infinity Industrial Park has significant implications, with Sh3 billion at stake. The court's decision highlights the importance of properly invoking insolvency powers and adhering to the Insolvency Act. The ruling also underscores the need for lenders to carefully consider their actions when dealing with debtors, especially in cases where disputes are ongoing.
Key points
- The High Court of Kenya has nullified Bank of Baroda's administration of Infinity Industrial Park due to improper invocation of insolvency powers.
- The court found that the administration was instituted prematurely, when the bank's alleged debt was not yet sufficiently ascertained.
- Bank of Baroda is facing execution of a Sh2.996 billion decree issued in favor of Infinity Industrial Park.
