https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7429

In re Bank of Baroda (Kenya) Limited (Ex-Parte Applicant) (Miscellaneous Civil Cause 558 of 2026) [2026] KEHC 7429 (KLR) (Commercial and Tax) (25 May 2026) (Ruling) Neutral citation: [2026] KEHC 7429 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Miscellaneous Civil Cause 558 of 2026 MO Ado, J May 25, 2026 IN THE MATTER OF VIMIT CONVERTERS LIMITED AND IN THE MATTER OF THE COMPANIES ACT (NO. 17 OF 2015) AND IN THE MATTER OF AN APPLICATION TO EXTEND TIME TO REGISTER A FURTHER LEGAL CHARGE BY VIMIT CONVERTERS LIMITED Ruling Introduction 1.The Ex-Parte Applicant, Bank of Baroda (Kenya) Limited, approached this Court by way of an urgent Notice of Motion dated 22nd May 2026. The application is brought pursuant to Order 51 Rule 1 of the Civil Procedure Rules, Sections 878 and 888(1) & (2) of the Companies Act (No. 17 of 2015), Rules 3 and 8(b) of the Companies (High Court) Rules, and Section 3A of the Civil Procedure Act. 2.The Applicant seeks an order from this Honourable Court extending the statutory time limit to register a Further Legal Charge with the Registrar of Companies. The subject instrument is a Further Legal Charge dated 7th February 2024, executed by the Chargor, Vimit Converters Limited, in favor of the Applicant to secure a maximum principal amount of Kenya Shillings One Hundred and Five Million Only (Kshs. 105,000,000/-). This charge was created over the property legally described as Title Number Land Reference Number 12715/531. The Applicant’s Case 3.The application is anchored on the grounds set forth on the face of the Motion and supported by the affidavit of Joel Weru, Esq., an advocate in the firm of MKJ Advocates LLP, which has the conduct of this matter on behalf of the Applicant. 4.The facts deponed by the Applicant reveal that the Further Legal Charge was duly prepared and executed by the parties on 7th February 2024. Following execution, the Applicant's advocates promptly presented the document for registration at the Nairobi Land Registry on 15th February 2024. 5.According to the Applicant, the land registration process was completed on or about 15th February 2024. However, due to an ongoing records digitization exercise at the Ministry of Lands, the physical registry file was inadvertently misplaced. As a result of this administrative glitch, the Applicant’s advocates were unable to secure the return of the registered title and charge documents from the Land Titles Registry until 23rd April 2024. 6.By the time the registered documents were retrieved, the mandatory thirty (30) day timeline prescribed under Section 885 of the Companies Act, 2015, for registering company charges had already lapsed. 7.The Applicant contends that the delay was entirely inadvertent, was not occasioned by negligence or deliberate omission on their part, and that unless the court expands the time, the charge will be rendered void under Section 889 of the Companies Act. This outcome would severely prejudice the Applicant’s financial security and compromise the mortgage facilities granted to the Chargor. Analysis and Determination 8.Having considered the application, the supporting affidavit, and the relevant law, the singular issue that stands for determination is: Whether the Applicant has met the statutory threshold for this Court to exercise its discretion to extend time for the registration of a company charge. 9.Section 885 of the Companies Act mandates that a company charge must be lodged with the Registrar of Companies within thirty (30) days from the date of its creation. Failure to register within the stipulated window triggers the penal provisions of Section 889, rendering the charge void against a liquidator or creditor of the company. 10.To mitigate harsh outcomes arising from genuine delays, the legislature enacted Section 888 of the Companies Act, 2015, which grants this Court judicial discretion to rectify the register of charges. Section 888(1) provides:“The Court may, on the application of the company or a person interested, and on such terms and conditions as seem to the court just and expedient, make an order extending the time for registration... if it is satisfied that the failure to register the charge... was accidental or due to inadvertence or to some other sufficient cause..." 11.The statutory grounds under which this discretion may be exercised are distinct: accident, inadvertence, or other sufficient cause. In the present case, the Applicant points to administrative delays at the Ministry of Lands, specifically the misplacement of the registry file during the registry's transition to a digital system. 12.From the pleadings, the Court notes that the Applicant's advocates demonstrated due diligence by executing and lodging the document at the Land Registry within eight (8) days of its creation. They cannot be held penalised for the systemic delays that followed within the public registry. 13.Courts have consistently held that where rectification merely aligns the register with the true intention of the parties, and no prejudice is shown, the Court ought to grant the orders sought – see for example In re Bettevest Investment Ltd [2025] KEHC 16460 (KLR) and In re ABSA Bank Kenya Plc [2026] KEHC 148 (KLR), where this Court allowed substantially similar applications. 14.The delay in this instance falls squarely within the category of "inadvertence" or "other sufficient cause." The omissions were outside the control of both the Applicant and its legal representatives. 15.Furthermore, on the material before Court, there is no evidence that any prejudice will be suffered by any third-party creditors or liquidators as the company is an ongoing concern. The extension simply seeks to formalise a transaction to which the Chargor, Vimit Converters Limited, fully consented. 16.In the circumstances, I find merit in the application and make the following orders:i.The time within which to register the Further Legal Charge dated 7th February 2024 over property Title Number Land Reference Number 12715/531, created by Vimit Converters Limited in favor of Bank of Baroda (Kenya) Limited, be and is hereby extended by a further thirty (30) days from the date of this Ruling.ii.The Registrar of Companies is directed to accept the lodgement and register the said Further Legal Charge out of time upon payment of the requisite statutory fees.iii.There shall be no order as to costs. 17.It is so ordered. DATED, SIGNED, AND DELIVERED AT NAIROBI THIS 25TH DAY OF MAY 2026HON. MR. JUSTICE MOSES ADOJUDGE OF THE HIGH COURT