The Court of Appeal dismissed an attempt by the Assets Recovery Agency (ARA) to block the release of Sh537 million held in accounts linked to former Nairobi Governor Mike Sonko.
In a ruling delivered on March 4, a three-judge bench comprising Justices Kathurima M’inoti, Chacha Mwita, and Bryam Ongaya held that it lacked the jurisdiction to grant a stay of execution against what it described as a “negative order” issued by the High Court.
The ARA, through lawyer Esther Muchiri, had moved to the appellate court seeking to stay a judgment by Justice Sifuna, who had previously dismissed the agency’s suit against Sonko with costs and lifted preservation orders that had frozen the funds since February 2020.
However, during the mention, Justice M’inoti questioned the legal basis of the application, he said the court cannot issue a stay against a dismissal.
“I mean, you are aware of consistent decisions of this court that it cannot issue a stay of execution in respect of a dismissal. There is nothing to stay in a dismissal,” court said.
The judge said that since the High Court dismissed the case, it did not order anyone to do anything, leaving the situation as it was.
According to Muchiri, the application is about preserving assets subject to the main appeal, arguing that a preservation order automatically subsists once an appeal is filed.
She argued that Section 97 of the Proceeds of Crime and Anti-Money Laundering Act provides that preservation orders remain in force once an appeal is filed.
The bench however rejected this line of reasoning, stating that if the preservation is automatic, then the application for a stay was unnecessary and not a matter they needed to decide.
“Then you didn’t have to make this application. If it is automatic, then they don’t have to make this application. We have nothing to do with that,” Justice M’inoti said.
After the court made its position clear, Muchiri withdrew the application.
Senior Counsel Harrisson Kinyanjui, representing former Nairobi Governor Mike Sonko, did not object to the withdrawal but requested that costs be awarded.
The bench reserved its ruling on the issue of costs, which is scheduled to be delivered on March 13.
While dismissing ARA’s suit, Justice Sifuna held that the agency had failed to prove that the money in question constituted proceeds of crime.
He lifted the preservation orders that had frozen the funds since February 2020 and awarded costs.
The judge criticized ARA for selective investigations, the absence of key witness statements, and reliance on unverified property sale agreements, ruling that the agency had not met the legal burden required in civil forfeiture proceedings.
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