By Sam Alfan.

An investor has suffered a blow after failing to stop Bank of Baroda from auctioning a 15 acre parcel of land in Eastern by-pass, earmarked for establishment of an industrial park.

Infinity Industrial Park Limited failed to convince High Court judge Peter Mulwa to stop the lender from selling the parcel of land in Njiru area over a loan of Sh1.9 billion.

The judge ruled that the orders sought were in the nature of mandatory injunctions, compelling the bank to release part of the charged property and to withdraw alleged adverse listings.

“These are substantive acts which, if granted, would go beyond preserving the status quo and effectively confer the Applicant part of the final relief sought in the main suit,” said the judge.

Justice Mulwa said such relief cannot be issued at the interlocutory stage unless the court was satisfied that an applicant’s case is unusually strong, clear, and not open to serious doubt.

“From the material placed before me, the disputes surrounding the alleged agreement to release the additional 15 acres, the question of default, and the parties’ respective obligations under the facility agreement are contested matters best resolved upon full evidence at trial,” judge Mulwa ruled.

The company moved to court seeking to restrain the lender from selling or interfering with the land, pending the determination of the case.

The company application supported by the affidavits of Ashok Rupshi Shah argued that the company was undertaking a large-scale industrial park development for SMEs on a 200-acre parcel of land, with a projected 15-year gestation period and the expectation of accommodating up to 1,000 SMEs.

The company argued that pursuant to an offer letter dated 26th June 2019, the Bank extended a loan facility of Sh.1,976,890,000 comprising a takeover loan from Equity Bank, a fresh overdraft facility, and a fresh term loan.

The facility was secured by charges over various properties, including LR. 11522, and a charge was created on 30th September 2019 over property known as L.R. 11522, L.R. 3734/59 (original 3734/344) situated on Chalbi Drive (off James Gichuru Road) and House No. 1 at Amer Residences along General Mathenge Drive. A replacement charge was created on 23rd February 2022 and registered on 27th April 2022 to allow the Applicant to surrender title LR. 11522 for change of user on condition that the new titles will be surrendered to secure a fresh legal charge.

It is alleged that delays occasioned by the Bank of Baroda, particularly in discharging LR. 11522 to facilitate change of user, disrupted project timelines and caused loss of expected revenue.

The company told the court that although Phase 1 is complete, the Bank had declined to release an additional 15 acres required for Phase 2, thus frustrating the company’s ability to secure financing from other investors.

Ashok argued that the risk of losing a multi-billion-shilling investment, renders damages an inadequate remedy.

The bank opposed the application and denied any wrongful delay in the discharge of title, stating that the company failed to collect the title upon approval in March 2020, only re-engaging in November 2020.

Through Wilson Mwaura the bank told the court that the partial discharge of certain securities was effected on 17th February 2022 after sufficient reasons were furnished and a professional undertaking given.

In the ruling, the judge further dismissed a prayer by the company seeking to compel the lender to withdraw or suspend any adverse notices or information sent to any licensed reference bureau, in relation to the loan in question.

The judge said there was no evidence to support the claim.

“The prayer for withdrawal or suspension of alleged credit bureau listings has not been supported by cogent evidence of actual listing, the specific dates, or the precise adverse reports in question,” said the judge.

The judge said that he was not satisfied that Infinity Industrial Park ltd has demonstrated the existence of a prima facie case with a probability of success so as to warrant the grant of the injunctive reliefs sought.

“The threshold under the first limb of the test in Nguruman Limited (supra) has therefore not been met. As was emphasized in that decision, the three limbs, prima facie case, irreparable harm, and balance of convenience are to be considered sequentially,” said the judge.