[2017] KEHC 2438 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

ANTI-CORRUPTION & ECONOMIC CRIMES DIVISION

MISCELLANEOUS APPLICATION NO. 17 OF 2017

IN THE MATTER OF: ANTI-CORRUPTION AND ECONOMIC CRIMES ACT (CAP.65)

-AND-

IN THE MATTER OF: AN APPLICATION BY ETHICS AND ANTI-CORRUPTION COMMISSSION FOR AN ORDER UNDER SECTION 56 OF THE ANTI-CORRUPTION AND ECONOMIC CRIMES ACT TO (CAP.65) TO PROHIBIT THE TRANSFER OR DISPOSAL OF OR OTHER DEALINGS (HOWEVER DESCRIBED) WITH THE MONIES BELOW:-

1. KSHS. 22,000,000/= HELD IN BANK OF FRICA (K) LTD

ACCOUNT NUMBER 0101078000, IN THE NAME OF FASTLANE FREIGHT FORWARDERS LTD.

2. KSHS. 30,000,000/= HELD IN NATIONAL BANK OF KENYA

ACCOUNT NUMBER 01030032483100, IN THE NAME OF STEPHEN ONYANGO

3. KSHS. 687,600/= HELD IN EQUITY BANK RUAI BRANCH,

ACCOUNT NUMBER 0170190551667, IN THE NAME OF ANDREW NGUGI

4. KSHS. 2,200,000/= HELD IN EQUITY BAMK TEA ROOM BRANCH,

ACCOUNT NUMBER 001010123764, IN THE NAME OF LINFIELD TRADING CO.

-BETWEEN-

ETHICS & ANTI-CORRUPTION COMMISSION..................................................................APPLICANT

VERSUS

FASTLINE FREIGHT

FORWARDERS LIMITED..........................................................................................1ST RESPONDENT

STEPHEN ONYANGO……………...........................................……………..............2ND RESPONDENT

ANDREW NGUGI………....……….........................................……………….…….3RD RESPONDENT

LINFIELD TRADING CO…………...........................................………….…………4TH RESPONDENT

R U L I N G

1. Before the Court is an Application dated 7th August, 2017 as filed by the Applicant seeking an extension of the subsisting preservation orders for a further period of six months as provided for under Section 56(3)of the Anti-Corruption and Economic Crimes Act.

2. The Application is supported by the Affidavit of David Terer dated 7th August, 2017 and is premised on grounds that the evidence collected so far has revealed new avenues of investigation for the Commission hence it is necessary for the Preservation Order to be extended for a further period of six (6) months to enable the completion of the investigations; and unless the prayers herein are granted, there is imminent danger of the Respondents or their agents, representatives, servants or assigns disposing of the assets thereby defeating the Commission’s investigations or any efforts to recover the same.

3. This application is opposed by an Affidavit dated 23rd August, 2017 and sworn by Andrew Kahenya, director of the 1st Respondent company, wherein he states that the request by the Applicant to be allowed a further six (6) months to carry out investigations is oppressive on the Respondents as they will have the allegations hanging around their heads for a period of one (1) year. The six (6) months period allowed previously was sufficient for the Applicants to carry out and complete their investigations and clear or charge suspects in Court with relevant offences.

4. In his Affidavit, Andrew Kahenya indicated that the bank account number 0120077810000 held at National Bank of Kenya, Sameer Park Branch was initially frozen by a Court Order issued in CHIEF MAGISTRATES MISC. CRIMINAL APPLICATION NO. 4112 OF 2016, REPUBLIC V. NATIONAL BANK OF KENYAand subsequently unfrozen as a result of an affidavit was sworn by police constable Boaz Oganga who deponed that investigations had disclosed that the payments made into the said account by the National Youth Service were genuine and not the proceeds of corruption. It is subsequent to the unfreezing of the abovementioned account that the 1st Respondent made payments from the said account to various other entities who included the Respondents herein.

5. Andrew Kahenya deponed that the companies: MASH LOGISTICS, SILVERBERG ENTERPRISES, CREDIBLE MEDICAL CENTRE, SINGAPORE MOTORS, ELVIS EXCLUSIVE TEXTILES and ASTROL PETROLEUM COMPANY, which the Applicant alleges are subject to further investigation have already had their respective bank accounts frozen pursuant to a Court Order dated 16th January, 2017 in MISC. APPLICATION NO. 11 OF 2017 which Court Order expired on 11th July, 2017 and was subsequently discharged.

6. This matter was dispensed with by way of written submissions. The 1st 2nd and 3rd Respondents, in their submissions, argued that Section 56(3) of the Anti-Corruption and Economic Crimes Actwhich gives the Court discretion to extend the duration of the freezing order upon application by the Commission, but such discretion ought to be exercised judiciously and used to achieve the ends of justice and fairness.

7. It was the submission of the 1st 2nd and 3rd Respondents that the Court has a duty to ensure the Constitutional rights of the Respondents herein who are under investigation are not violated. They relied on the case of Lloyd and Others v Mcmahon (1987) 1 ALL ER 1119 at 1161 wherein the Court observed thus:

“when a statute has conferred on anybody the power to make decisions affecting individuals, the Court will not only require the procedure prescribed by statute to be followed but will readily imply so much more to be introduced by way of additional procedural safeguards as will ensure the attainment of fairness”

8. The Respondents relied on Article 47 of the Constitution of Kenya, 2010 which provide for the right to expeditious, efficient, lawful, reasonable and procedurally fair administrative action and argued that the extension of the freezing order on the Respondents bank accounts is oppressive and an infringement of their rights. It was their submission that the need to preserve the Respondents assets so as to give the Applicant more time to carry out investigations should be balanced with the Constitutional rights of the Respondents to have access to their assets and accounts.

9. It was the Respondents submission that the original source of funds of the bank accounts that have been frozen were from the 1st Respondents bank account No 0120077810000 held at NATIONAL BANK OF KENYA, SAMEER PARK BRANCH. This account had previously been frozen by a Court Order issued in CHIEF MAGISTRATES MISCELLENOUS APPLICATION NO 4112 OF 2016 which, after investigations was concluded that the payments made into the subject account were genuine and not the proceeds of corruption. The Respondents submit that there is therefore nothing further to be investigated and there is therefore no justifiable reason to extend the Order. The Respondents pray the Application be dismissed with costs.

10. The Applicant’s submission was that Courts have, in various decisions expounded on the instances when a preservation order can be extended revealing that the burden lies with the Applicant to satisfy the Court that it is deserving of the orders sought. They relied on the following cases:

(i) Ethics and Anti-Corruption Commission v Gladys Gathoni Chege t/a Digiage Agency (2017) eKLR.

(ii) Ethics and Anti-Corruption Commission v Equity Bank Kenya Limited & another (2017) eKLR

11. The Applicant argues that it has demonstrated that there are plausible reasons to extend the Preservation Orders based on the affidavit of the forensic officer, which indicated that investigations began as soon as the first Preservation Order was issued on 8th February, 2017. So far investigations have established that several public officials at the State Department of Public Service, Youth and Gender Affairs have perpetrated corrupt activities in collusion with some of the Respondents herein and benefitted from the said corrupt activities leading to the loss of more than Kshs. 200,000,000 being public funds.

12. The Applicant submits that there has been great progress made in investigating the case. Information and documents from the Director General, National Transport and Safety Authority, the Commissioner Secretary, Ministry of Public Service, Youth and Gender Affairs have enabled the Commission to discover new avenues for inquiry that require more time to investigate. As such, the relationship between the 1st and 4th Respondent companies as well as the 2nd and 3rd Respondents and public officers at the Ministry of Public Service, Youth and Gender Affairs is still matter of investigations by the Commission.

13. The Applicant cited the case of DPP v Nairobi Chief Magistrates Court and Another (2016) eKLRand submitted that investigations into corruption and economic crimes is a matter of public interest, which should prevail over private rights whenever there exists a conflict between the two. The Applicant prays that the Application be allowed and the preservation order issued on 8th February, 2017 be extended for a further six (6) months.

14. The Applicant has brought this Application under Section 56 (3) of the Anti-Corruption and Economic Crimes Act which provides that;

“An order under this Section shall have the effect for six months and may be extended by the court on the Application of the Commission.”

The issue for determination however is whether the prayer for the extension of the order issued on 8th February, 2017 is merited.

15. Indeed the burden is on the Applicant to satisfy the Court that it is deserving of the Orders sought. I have considered the issues raised by the Applicant and I am satisfied that the applicant has discharged its onus of proof by showing that considerable progress has been made in investigating this case but more time is needed to finalize investigations. I am persuaded by the authority cited by counsel for the applicant in DPP vs Nairobi Chief Magistrate’s Court & Another (supra)which states that investigations on corruption and economic crimes touch on public interest. I am of the considered view that it is in the interest of Kenyans to know if indeed if the said payments were genuinely made to the Respondents; which can only be done if the Applicant is given more time to finalize its investigation.

16. It is the responsibility of this court to uphold the public interest and at the same time, ensure that a reasonable balance between the rights of the individual and the public interest is maintained. Under Article 24 of the Constitution, exceptions are provided for where the rights or fundamental freedoms of individuals can be limited if it is deemed fir to do so under Article 24 (1) a right or fundamental freedom in the Bill of Rights shall not be limited except by law, and then only to the extent that the limitation is reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom, taking into account all relevant factors, including—

(a) the nature of the right or fundamental freedom;

(b) the importance of the purpose of the limitation;

(c) the nature and extent of the limitation;

(d) the need to ensure that the enjoyment of rights and fundamental freedoms by any individual does not prejudice the rights and fundamental freedoms of others; and

(e) the relation between the limitation and its purpose and whether there are less restrictive means to achieve the purpose.

17. The limitation of individual rights may be necessary under the Anti Corruption and Economic Crimes Act so as to allow for examination, investigation, trial or inquiry provided that it is justifiable. In James Joram Nyagah & Another -vs- the Attorney General & Another, High Court Misc. Civil Application No. 1732 of 2004,the court observed:

“Clearly, the rights and freedoms of the individual are not absolute but are subject to other people’s rights and the general public interest at large.”

18. Section 53(4) ACECA allows a party aggrieved by a preservation order to apply to the Court to discharge or vary such an order. It reads:

“(4) A person served with an order under this section may, within fifteen days after being served, apply to the court to discharge or vary the order and the court may, after hearing the parties, discharge or vary the order or dismiss the application.”

The burden is however placed on the party seeking a discharge or variation of the preservation order. According to Section 53(5) of the ACECA such a party must demonstrate that the property in respect of which the order is discharged or varied was not acquired as a result of corrupt conduct.

19. It is my finding that the purpose of the investigations will be defeated if the orders sought are not granted. In the circumstances, I make the following orders:-

(i) The preservation orders issued on, 8th February, 2017 be extended by a period of six months prohibiting the transfer disposal or any other dealing with respect to:

1. KSHS. 22,000,000/=held in Bank of Africa (K) Ltd account number 0101078000, in the name ofFastlane Freight Forwarders Ltd.

2. KSHS. 30,000,000/=held in National Bank of Kenya account number 01030032483100, in the name ofStephen Onyango.

3. KSHS. 687,600/=held in Equity Bank Ruai Branch, account number 0170190551667, in the name ofAndrew Ngugi.

4. KSHS. 2,200,000/=held in Equity Bank Tea Room Branch, account number 001010123764, in the name of Linfield Trading Co.

Each party shall bear its own costs.

DATED, SEALEDandDELIVEREDatNAIROBIthis 3rd day of November, 2017.

L. A. ACHODE

JUDGE