https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1253

Assets Recovery Agency v Eis Afrika Group Ltd (Civil Appeal (Application) E511 of 2025) [2026] KECA 1253 (KLR) (3 July 2026) (Ruling) Neutral citation: [2026] KECA 1253 (KLR) Republic of Kenya In the Court of Appeal at Nairobi Civil Appeal (Application) E511 of 2025 DK Musinga, AO Muchelule & GV Odunga, JJA July 3, 2026 Between Assets Recovery Agency Applicant and Eis Afrika Group Limited Respondent (Being an application for stay of execution pending hearing and determination of an appeal against the Judgment and Decree of the High Court of Kenya at Nairobi (B.M. Musyoki, J.) dated 20th June 2025 in Civil Suit No. E025 of 2024) Ruling 1.The application before us is dated 17th July 2025, and is brought pursuant to Article 164(3) of the Constitution, sections 3, 3A and 3B of the Appellate Jurisdiction Act, the Judicature Act and rule 5(2)(b) of the Court of Appeal Rules, 2022. The applicant seeks the following orders:i.That this Honourable Court be pleased to certify this application as urgent and be admitted for hearing on priority basis.ii.That this honourable Court be pleased to grant a stay order of execution of the judgment (by B.M. Musyoki) dated 20th June 2025 at the Anti-corruption and Economic Crimes Division (Milimani Law Courts) Suit Number E125 of 2024) pending the hearing and determination of the applicant’s appeal filed vide Civil Appeal Number E511 of 2025 between the Asset Recovery Agency and EIS Africa Group Limited.iii.That this Honourable Court be pleased to grant an order staying the judgment of Hon. B. M. Musyoki dated 20th June 2025 and any consequential orders flowing from the same.iv.That the respondent/applicant be at liberty to apply for such further orders and/or directions as this Honourable Court may deem just and expedient to grant. 2.The background to the application is that the applicant herein filed an application in the High Court dated 29th June 2024, seeking orders that funds amounting to USD 274,369.56, held in the respondent’s bank account No. xxxx [details withheld] at I & M Bank, were proceeds of crime and liable to forfeiture to the government, and that the said funds be forfeited to the applicant on behalf of the government. 3.The application was opposed. It was deponed that the respondent is a limited liability company incorporated in Kenya on 21st February 2024 and is an affiliate of EIS Company SPRL Burundi, a company incorporated in Burundi on 17th March 2011. EIS Burundi’s principal business is the provision of civil engineering services, including the construction of roads, bridges, and causeways. Owing to its growth, EIS Burundi established affiliate companies across the East African region operating under the name EIS Group Limited, which necessitated the opening of several bank accounts in the respective countries, including a USD account at FIN Bank, Burundi, for international transactions. 4.It was further deponed that EIS Burundi successfully secured a contract for the construction and installation of the Kavimvira Border Post in South Kivu Province, serving as a border between Burundi and the Democratic Republic of Congo, at a total contract sum of USD 5,033,576. The project was fully funded by the World Bank, which initially disbursed USD 1,006,605 to EIS Burundi through its USD account at FIN Bank, Burundi. Under the contract, 20% of the disbursed funds were earmarked for the purchase and importation of construction equipment for use at the project site. 5.To avoid challenges in wiring the funds pursuant to Burundi’s financial transaction regulations, FIN Bank advised EIS Burundi to open an account with I & M Bank in Kenya, where USD 350,000 was deposited due to the relatively flexible Kenyan financial system. Upon receipt of the funds, the respondent commenced transfers of specific amounts to meet project-related expenses. However, these transactions were halted following orders obtained by the applicant from the Chief Magistrate’s Court at Milimani. Pursuant to those orders, the deponent presented himself to the agency to record a statement explaining the source and intended use of the funds, and furnished supporting documentation to substantiate their lawful origin. 6.In its judgment, the High Court held that the applicant’s statutory duty to investigate, trace, and recover proceeds of crime extends beyond simply obtaining information or harboring suspicions about transactions. The Court criticized the applicant’s investigations, noting that the applicant failed to verify the authenticity of the contract and the details provided by the respondent regarding the World Bank or any of its affiliated institutions. The Court also found that the applicant did not establish a prima facie case, as the investigation report did not substantiate the allegations made. On a balance of probabilities, the applicant did not meet its burden of proving that the funds in question were proceeds of crime. Conversely, the respondent adequately explained the source of the funds, supported by documentary evidence showing a contract with the Government of Burundi. As a result, the Court dismissed the application with costs for lack of merit. 7.Aggrieved by the decision of the High Court, the applicant filed the present application, which is premised on the grounds set out on its face and supported by an affidavit sworn on the same date by Corporal Alfred Musalia, an investigator with the applicant. He deponed that on 1st March 2024, the agency received intelligence relating to suspected money-laundering schemes and proceeds of crime allegedly perpetrated by the respondent, contrary to the provisions of the Act. Consequently, Inquiry File No. 20 of 2024 was opened to investigate the allegations. It was averred that the investigations concluded that the respondent had executed a money-laundering scheme intended to conceal and disguise the nature, source, disposition, and movement of illicit funds suspected to constitute proceeds of crime, based on the evidence gathered. He further stated that an analysis of the respondent’s bank statements revealed that the respondent received a suspicious sum of USD 350,000 from a foreign jurisdiction. Upon receipt of the funds, the respondent allegedly withdrew the money in a suspicious manner, which formed the basis of the application before the High Court. 8.The applicant contended that the intended appeal is arguable and has high chances of success. It was further argued that the learned Judge improperly relied on inadmissible evidence tendered by the respondent; dismissed the applicant’s application in the absence of any credible evidence from the respondent; imposed an unduly high evidentiary threshold contrary to the nature, purpose, and spirit of the Act; and erred by shifting the burden of proof to the agency, thereby adopting an unduly narrow interpretation of the Act. Finally, the applicant asserted that it stands to suffer loss that cannot be adequately compensated by an award of damages if the orders sought are not granted. 9.The respondent opposed the application. Nduwimana Aimable, a Rwandan national, deponed that he is the sole member and director of the respondent, a limited liability company incorporated in Nairobi, Kenya, on 21st February 2024. He stated that the company was established to provide services in civil engineering, including roads, bridges, and causeways; buildings; hydraulic works; and transport infrastructure. He averred that the seized funds constituted the contract sum arising from a bid dated 16th May 2023 for the execution of infrastructure construction works and the installation of the Kavimira Border Post in South Kivu Province, valued at USD 5,033,576.15, and funded by the World Bank. 10.He further contended that the only document relied upon by the applicant to challenge the source of the funds was an alleged Cyber Investigation Report dated 7th May 2024, purportedly signed by an unnamed Digital Forensic Analyst. According to him, the report merely concluded that the email address “mdia1@worldbank.org” was not genuine. However, he asserted that the World Bank had confirmed ownership of the email address and had independently verified the supporting documents relating to the funds. He maintained that the applicant failed to verify the authenticity of the documents or the email with the World Bank offices in Nairobi or through the Burundian Embassy in Kenya. The respondent therefore aligned itself with the finding of the superior court that the applicant conducted only desk-based investigations, rendering the present appeal unarguable. It was further argued that the orders appealed from were negative orders, which are not capable of being stayed by this Court. In conclusion, he noted that the order restricting debits from the respondent’s accounts held at I & M Bank has remained in force for 17 months, thereby completely stalling the project. 11.The application came up for hearing before us on a virtual platform on 24th November 2025. Learned counsel Mr. Mohammed Adow appeared for the applicant while learned counsel Mr. Kenyatta Aggrey Odiwuor appeared for the respondent. The application was canvassed by way of written submissions with limited oral highlights. The submissions for the applicant are dated 11th November 2025 and those of the respondent are dated 14th November 2025. 12.In brief, Mr. Mohammed Adow submitted that the application before the Court was made within an appeal that had already been filed, to wit, Civil Appeal No. E511 of 2025. He contended that the applicant had been in continuous communication with both the bank and the respondent, taking the position that section 97 of the law provided for an automatic stay upon the filing of an appeal, a position with which the respondent disagreed. In response to the Court’s inquiry, counsel confirmed that the funds in question remained held in the bank. 13.Mr. Kenyatta Aggrey Odiwuor advanced the argument that section 97 of POCAMLA should be read alongside, and not in isolation from, section 89(1)(b) of the same Act. He submitted that under section 89(1)(b), any preservation orders in force automatically lapse upon the conclusion of the proceedings. Accordingly, once the proceedings are concluded, as in the present case, the preservation orders stand rescinded, leaving the Asset Recovery Agency with only the option of applying afresh for injunctive or conservatory relief if it wishes to preserve the funds. 14.Counsel further argued that section 97 does not oust the discretion or jurisdiction of the Court under rule 5(2)(b), and that it applies only to interim preservation orders, not final orders. He submitted that final orders are expressly governed by section 89(1)(b). It was therefore contended that Parliament could not have intended to enact two contradictory provisions, one purporting to provide for an automatic stay and the other clearly providing for the rescission of preservation orders upon the conclusion of proceedings. He concluded that the orders appealed from were negative orders and, in the absence of a formal application for an injunction, an order of stay could not issue in favour of the applicant. 15.In response to the Court’s inquiry, counsel confirmed that the USD 350,000 remained held by the bank, a situation he submitted was gravely prejudicial to the respondent. He explained that the funds were meant for the construction of a border post between the Republic of Burundi and the Democratic Republic of Congo and were financed by the World Bank. He noted that all supporting documentation had been provided and confirmed by the trial court, yet the project had been stalled for approximately 18 months. 16.Counsel further submitted that the applicant’s case was founded solely on an allegation that the email provided by the respondent did not originate from the World Bank, an allegation that had been disproved by a written confirmation from the World Bank, which the applicant had not controverted. He added that the applicant had previously sought and obtained a 60-day stay in the lower court, which subsequently lapsed before moving the present Court, demonstrating the applicant’s own acknowledgment that section 97 does not, on its own, provide for an automatic stay and that a formal court order was required. 17.In rebuttal, Mr. Adow urged that section 89 of POCAMLA is inapplicable to forfeiture proceedings. He argued that section 89 deals with the variation or rescission of court orders in the context of applications by parties whose assets have been frozen, particularly for purposes such as meeting living or legal expenses, and does not govern forfeiture matters. 18.Counsel maintained that the applicable provision in forfeiture proceedings is section 97, and not section 89, as suggested by the respondent. He further submitted that issues relating to whether the project had stalled or whether sufficient evidence existed went to the merits of the appeal and were therefore not for determination at the interlocutory stage. He concluded by reiterating that section 89 does not apply in the present circumstances, and that section 97 is the correct provision governing the matter. 19.We have considered the application, the grounds in support thereof, the submissions, the authorities cited and the law. The jurisdiction of this Court under rule 5(2)(b) of this Court’s Rules is discretionary and guided by the interests of justice. 20.The principles for granting a stay of execution, injunction or stay of proceedings under that rule are well settled as was observed by this Court in the case of Trust Bank Limited and Another - vs- Investech Bank Limited & 3 Others [2000] eKLR where the Court delineated the jurisdiction of this Court in such an application as follows:“The jurisdiction of the Court under Rule 5(2)(b) is original and discretionary and it is trite law that to succeed an applicant has to show firstly that his appeal or intended appeal is arguable, to put another way, it is not frivolous and secondly that unless he is granted a stay the appeal or intended appeal, if successful will be rendered nugatory. These are the guiding principles but these principles must be considered against facts and circumstances of each case…” 21.Mr. Adow argued that section 97 of the POCAMLA provided for an automatic stay upon the filing of an appeal, while according to Mr. Odiwuor, section 97 did not oust the discretion or jurisdiction of the Court under rule 5(2)(b), and that it applies only to interim preservation orders, not final orders. He submitted that final orders are expressly governed by section 89(1)(b). 22.Section 89 relates to variations and rescission of orders. Section 89(1) reads:“Variation and rescission of ordersA court which makes a preservation order—a.may, on application by a person affected by that order, vary or rescind the preservation order or an order authorising the seizure of the property concerned or other ancillary order if it is satisfied—i.that the operation of the order concerned will deprive the applicant of the means to provide for his reasonable living expenses and cause undue hardship for the applicant; andii.that the hardship that the applicant will suffer as a result of the order outweighs the risk that the property concerned may be destroyed, lost, damaged, concealed or transferred; andb.shall rescind the preservation order when the proceedings against the defendant concerned are concluded.” 23.A preservation order under section 82 was made on 16th May 2024. It was gazetted on 31st May 2024. Under section 84, such order expires ninety (90) days after the date on which notice of the making of the order is published in the Gazette, unless: -a.there is an application for a forfeiture order pending before the court in respect of the property subject to the preservation order;b.there is an unsatisfied forfeiture order in force in relation to the property subject to the preservation order; orc.the order is rescinded before the expiry of that period. 24.The applicant made an application under section 92 for forfeiture of the said sums on 29th June 2024. That is the application that was heard and eventually dismissed on 20th June 2025. The applicant filed a notice of appeal on 24th June 2025 and lodged an appeal on 3rd July 2025. 25.Section 97 of the POCAMLA states as follows: -“Any preservation order and any order authorizing the seizure of the property concerned or other ancillary order which is in force at the time of any decision regarding the making of a forfeiture order under section 92(1) shall remain in force pending the outcome of any appeal against the decision concerned.” 26.We agree with Mr. Adow that section 89 does not relate to forfeiture proceedings. As we have stated earlier, it relates to variation and rescission of Preservation Orders, which is an interim order that prohibits a person from dealing in any manner with property or assets suspected to be proceeds of crime. Such an order is valid for 90 days, during which the Assets Recovery Authority must apply for a forfeiture order, as it did in this case. The relevant provision in this application is therefore section 97 and not 89. 27.Although the marginal note to section 97 reads “Appeal against forfeiture order,” a proper reading of the provisions thereof reveal that even in instances where a forfeiture order has not been made, as was the case in this matter, if there was a preservation order in force, (as was the case in this matter), or any order authorizing the seizure of property at the time the court is making any decision on the application for forfeiture, which it may either grant or dismiss, the preservation order or the order authorizing the seizure, or any other ancillary order that had been made earlier, shall remain in force if any appeal has been filed. Such an appeal may be filed either by the Assets Recovery Authority if the forfeiture application has been dismissed, or by the person concerned or affected, if a forfeiture order has been made. 28.In our view, section 97 protects the assets from being dissipated or transferred while an appeal is pending before this Court. It may be viewed as a “safety net” for the State to ensure that assets that are suspected to be proceeds of crime and had lawfully been preserved pursuant to a trial court’s order are not released immediately after dismissal of forfeiture proceedings, if the State has appealed. The section also provides a statutory framework for an affected person or entity to appeal against forfeiture orders, so that property is not forfeited to the State before the appellate process is exhausted. 29.In other jurisdictions, there are similar provisions as section 97 of POCAMLA. In South Africa, section 55 of Prevention of Organized Crime Act (POCA),1998, provides as follows: “Any preservation of property order and any order authorising the seizure of the property concerned or other ancillary order which is in force at the time of any decision regarding the making of a forfeiture order which is in force at the time of any decision regarding the making of a forfeiture order under section 50(1) shall remain in force pending the outcome of any appeal against the decision concerned.” 30.In National Director of Public Prosecutions V Falk [2020] ZASKA 117, the South African Supreme Court of Appeal dealt with the continuation of POCA orders during appeals. The Court affirmed that the legislature’s intent was to freeze the status quo so that assets are not dissipated while appellate proceedings are ongoing. 31.Earlier on, in National Director of Public Prosecutions V Mohamed 2003(4) SA 1(CC), the Constitutional Court of South Africa endorsed the civil forfeiture scheme as a vital preventive measure for ensuring that property alleged to be proceeds of unlawful activity remains frozen while all legal challenges- including appeals, are exhausted. 32.In Namibia, section 66 of Prevention of Organized Crime Act 29 of 2004 is almost word for word with section 55 of POCA, South Africa. It states: “Any preservation of property order and any order authorising the seizure of the property concerned or ancillary order which is in force at the time of any decision regarding the making of a forfeiture order under section 61(1) remains in force pending the outcome of an appeal against the decision concerned.” 33.In The Prosecutor-General V Erastus G. Heita (HC-MD-CIV- MOT-POCA-2021-00443) [2024] NAHCMD 87, the Namibian High Court reviewed the process of forfeiture of funds associated with crime and discussed the application of the aforesaid section of the country’s POCA. The Court affirmed that properties under preservation are barred from being dissipated while an appeal is pending. 34.In Nigeria, section 20 of the Proceeds of Crime (Recovery and Management) Act, 2022 provides that: “A preservation order and any order authorising the seizure of the property concerned or other ancillary order that is in force at the time of any decision regarding the making of a forfeiture order under this Act shall remain in force pending the outcome of any appeal against the decision concerned.” 35.In the matter that is before us, the amount involved is substantial, USD 274,369.56. Although the respondent is a limited liability company incorporated in Kenya, its sole director is a Rwandese by nationality. If the orders sought are not granted, the respondent shall withdraw the funds, and if the appeal succeeds, it will have been rendered nugatory. 36.While we appreciate that the forfeiture application was dismissed, and ordinarily an order of stay of execution cannot issue from a negative order, the compelling provisions of section 97 of POCAMLA and the nature of this matter cannot be disregarded. Section 97 provides a statutory stay to ensure that property that is subject to a preservation order is not dissipated or released while appellate proceedings are ongoing. 37.We believe that the interests of justice will be served by granting the orders sought and directing that the pending appeal be heard and disposed of expeditiously. 38.Consequently, we make the following orders:a.Execution of the judgment by Musyoki, J. dated 20th June 2025 and the subsequent orders allowing the release of USD 274,369.56 held at the respondent’s bank account at I&M Bank is hereby stayed pending hearing and determination of Civil Appeal No. E511 of 2025.b.The said appeal should be heard within sixty (60) days from the date hereof and determined expeditiously thereafter.c.The costs of this application shall abide the outcome of the appeal. DATED AND DELIVERED AT NAIROBI THIS 3RD DAY OF JULY 2026.D. K. MUSINGA..........................JUDGE OF APPEALA. O. MUCHELULE..........................JUDGE OF APPEALG. V. ODUNGA..........................JUDGE OF APPEALI certify that this is a true copy of the original.SignedDEPUTY REGISTRAR.