Assets Recovery Agency v Samuel Wachenje & 7 others [2020] eKLR

Case Caption:

In the High Court of Kenya at Nairobi; Anti-Corruption and Economic Crimes Division (Coram: Mumbi Ngugi J); Miscellaneous Application No. 13 of 2016; The Assets Recovery Agency (Applicant) v Samuel Wachenje alias Sam Mwandime, Susan Mkiwa Mndanyi, Vandame John, Anthony Kihara Gethi, Charity Wangui Gethi, Ndungu John, Gachoka Paul & James Kisingo (1st – 8th Respondents respectively)

Case URL:

http://kenyalaw.org/caselaw/cases/view/201915/

Summary Significance:

Any property proved to be proceeds of crime is liable to forfeiture to the state under criminal or civil forfeiture proceedings. Criminal convictions are, however, not a prerequisite for valid civil forfeiture proceedings.

Applicable laws:

•Article 40 of the Constitution of Kenya, 2010
•Sections 81, 90, 92 and 100 of the Proceeds of Crime and Anti-Money Laundering Act
•Order 51 of the Civil Procedure Rules, 2010

Brief Facts:

The Applicant instituted proceedings under Sections 81, 90, 92 and 100 of the Proceeds of Crime and Anti-Money Laundering Act (POCAMLA) as read with order 51 of the Civil Procedure Rules seeking the forfeiture of illegally acquired assets in the hands of the Respondents. These assets included a Maisonette House at Kasarani-LR. No. 20857/190, Plot L.R. No. Ruiru, Juja East Block 2/360, Motor Vehicle Registration Number KCE 852T Toyota Prado, Motor Vehicle Registration Number KCE 874R Toyota Prado, Motor Vehicle Registration Number KCD 536P Toyota Prado and Motor Vehicle Registration Number KCB 715E S. Wagon Toyota Prado. The Applicant averred that investigations by the Directorate of Criminal investigations revealed that the assets in question were acquired from the proceeds of theft and fraud of funds amounting to Kes. 791,000,000 from the State Department of Planning in the Ministry of Devolution. Neither of the Respondents entered appearance nor did they file a response or participate in the proceedings.

Issues for Determination:

I.Whether the properties subject to the forfeiture application are proceeds of crime
II.Whether the properties should be forfeited to the state if found to be proceeds of crime
III.Whether the application for civil forfeiture violates the Respondent’s rights to property under Article 40 of the Constitution
IV.Whether conviction is a precondition for civil proceedings under Part VIII of POCAMLA

Holding:

On whether the Respondents’ properties were proceeds of crime, the court noted that the Applicant had led evidence establishing that they had been purchased using funds stolen from the National Youth Service. On the other hand, by not filing a defence, the Respondents had failed to dispense with their duty to provide an explanation as to the source of their funds as provided in the case of Assets Recovery Agency v Pamela Aboo; Ethics &Anti-Corruption Commission (Interested Party) [2018] eKLR. Therefore, the court held that the properties were indeed proceeds of crime. On whether the assets should be forfeited to the state, the court relied on the provisions under Section 92 (1) of the POCAMLA granting the High Court the right to make an order for forfeiture. It held that since the property had been proved to be proceeds of crime, it was therefore subject to forfeiture to the State. On the Respondents’ right to property, the court held that the protection afforded to this right under Article 40 (6) does not extend to illegally acquired property. Therefore, an order for forfeiture would not violate the Respondent’s right to property. On whether a conviction was a necessary precondition for civil forfeiture proceedings, the court was guided by Section 92 (4) of the POCAMLA providing that civil proceedings will not be affected by the outcome of any criminal case and the decision in Kenya Anti-Corruption Commission v Stanley Mombo Amuti [2017] eKLR where the court held that “Criminal forfeiture requires a criminal trial and conviction while civil forfeiture is employed where the subject of inquiry has not been convicted of the underlying criminal offence, whether as a result of lack of admissible evidence, or a failure to discharge the burden of proof in a criminal trial.”. In light of these authorities, the court held that criminal proceedings were not necessary for civil forfeiture. The court granted the orders sought by the Applicant.

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