Automated Summary
Key Facts
The Assets Recovery Agency (ARA) froze the bank account of Isabel Nyaguthii Wanjohi on June 7, 2022, citing reasonable grounds to believe the funds were proceeds of crime or involved in money laundering. Wanjohi, as the head of Treasury for Platcorp Group, argued that the funds were part of legitimate company loans and that the preservation order caused reputational damage and operational harm to the group. The court dismissed her application to rescind the order, finding she did not meet the legal threshold under Section 89(1)(a) of the Proceeds of Crime and Anti-Money Laundering Act, as she failed to demonstrate that the order deprived her of reasonable living expenses or caused undue hardship.
Issues
- Whether the Respondent/Applicant meets the threshold criteria under Section 89(1)(a) of the Proceeds of Crime and Anti-Money Laundering Act to warrant rescission or variation of the preservation order, specifically demonstrating undue hardship outweighing the risk of fund dissipation.
- Whether the application is fatally defective due to lack of proper authorization under the company seal as required by Order 4 Rule 1(6) of the Civil Procedure Rules, and whether this defect was curable.
Holdings
- The court determined that the application is not fatally defective as the required corporate authority was subsequently filed, curing the initial deficiency. The application is therefore competent and properly before the court.
- The court dismissed the application on merits, finding that the Applicant failed to demonstrate undue hardship under Section 89(1)(a) of the Proceeds of Crime and Anti-Money Laundering Act. The Applicant's claims regarding reputation damage and adverse business impact were insufficient to meet the statutory threshold for rescinding the preservation order.
Remedies
The court dismissed the application to rescind the preservation orders, finding that the Applicant did not meet the required threshold under Section 89(1)(a) of the Proceeds of Crime and Anti-Money Laundering Act. The costs of the application were awarded to the Assets Recovery Agency.
Legal Principles
- The ruling noted that the Agency must prove the Applicant had knowledge the funds were proceeds of crime. The Applicant's explanation of legitimate business transactions was deemed plausible, and no evidence of criminal intent (mens rea) was provided by the Agency to justify the preservation order.
- The court emphasized that the Assets Recovery Agency must demonstrate reasonable grounds to believe the funds are proceeds of crime or used in an offence under Section 82 of the Proceeds of Crime and Anti-Money Laundering Act. The Applicant failed to meet the threshold for rescission under Section 89(1)(a) as she did not prove the preservation order caused undue hardship.
Precedent Name
- Samuel Watatua & Another v Republic Court of Appeal Nai Criminal Appeal no. 2 of 2013
- Abdulharman Mahmoud Sheikh & 6 others V Republic & others
- Fundo Soberano De Angola & others v Dos Santos & Others
- Bank Mellat v Nickpour
- Kenya Revenue Authority v Pevans East Africa Limited
- Bahadurali Ebrahim Shamji v Al Noor Jamal & 2 others
- Stanley Mombo Amuti v Kenya Anti-Corruption Commission
- Kwale International Sugar Company Limited v Kenya Bureau of Standards & 5 others
- Kenya Anti-Corruption Commission v John Joel ria and 17 Others
- Asset Recovery Agency Lilian Wanja Muthoni T/A Sahara Consultants and 2 Others
- Onto circuit India v Axis Bank
- Ms Radha Krishan Industries v State of Himachal Pradesh & others
- Hassan Kiptoo Kosgey v Spring West Kenya limited
- Assets Recovery Agency v Ibrahim
Cited Statute
Proceeds of Crime and Anti-Money Laundering Act
Judge Name
E N Maina
Passage Text
- The court concluded that 'the application is devoid of merit and it is dismissed with costs to the ARA/Respondent.'
- The court held that 'the mere fact therefore that the ARA/Respondent marked the file in the lower court as settled does not qualify as a ground to discharge the orders herein. There was in any event nothing placed before this court to demonstrate that the ARA/Respondent was satisfied with the evidence placed before it by the Respondent/Applicant and that based on that evidence it had agreed not to move forward with the matter.'
- The court determined that 'the Applicant must demonstrate that the operation of the order will deprive them of the means to provide for their reasonable living expenses and cause undue hardship to them... Nowhere has she stated that she has been deprived of her means to provide for her reasonable living expenses and that as a result she has suffered undue hardship.'