Indian bank ICICI has been allowed to revive its claim for $40 million (Sh4 billion) from collapsed flower firm Karuturi Limited following a Court of Appeal ruling.
The Court of Appeal has opened the door for ICICI to revive its plans to sell Karuturi’s land in Naivasha valued at Sh8 billion to recover loans extended to the flower firm, after setting aside a 2015 judgment by High Court judge Francis Gikonyo.
Justice Gikonyo revoked ICICI’s appointment of a receiver manager alongside plans by the Indian lender to sell Karuturi’s land.
The judge argued that ICICI had breached the loan agreement by failing to release Sh2.5 billion to the flower firm, denting plans to get Karuturi up and running.
But Court of Appeal judges Alnashir Visram, Wanjiru Karanja and Martha Koome have ruled that Justice Gikonyo should have awaited full trial of the suit before issuing any orders, whether in favour of ICICI or Karuturi.
The appellate judges added that Justice Gikonyo’s decision was based only on affidavits filed by the two sides, and that he should have awaited a full trial to test all evidence before lifting ICICI’s receivership.
“Operating under the foregoing misapprehension, the learned judge ended up making final findings at the interlocutory stage. There was no basis for the learned judge to make the said findings in light of the conflicting evidence, which could only be tested in a full trial.”
“Having expressed ourselves as herein above we find that the learned judge did not properly exercise his discretion. In the end we allow the appeal with costs and set aside the impugned ruling and the injunctive orders issued thereunder,” the Appellate Court judges ruled.
ICICI appointed Kolluri Kama Satry as receiver manager in June 2014, just four months after CFC Stanbic #ticker:CFC had appointed Ian Small and Kieran Day as statutory managers.
The High Court last year gave a green light for the liquidation of Karuturi, but the move has been stalled by opposition from the firm’s owners.