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Court of AppealDismissedCivil Appeal (Application) E542 of 2022· [2022] KECA 1173 (KLR)

Rafiki Microfinance Bank Limited v Assets Recovery Agency & 2 others

Court of Appeal
21 October 2022
KMK. M'InotiKLK. I. LaibutaPGP. M. Gachoka
658 words in judgment
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The bottom line

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Kenya's Court of Appeal refused a stay of a forfeiture order because POCAMLA already suspends enforcement automatically while an appeal is pending.

What this practically means

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Executive summary

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The applicant, Rafiki Microfinance Bank Limited, moved the Court of Appeal under rule 5(2)(b) of the Court of Appeal Rules for stay of execution of the judgment and decree of the High Court (E. N. Maina, J.) dated 28 July 2022 in ACEC No. E020 of 2020, a forfeiture order under the Proceeds of Crime and Anti-Money Laundering Act, 2009, pending an intended appeal. The applicant contended that the fixed deposit in the name of the second respondent, which was the subject of the forfeiture order, also secured several third-party loan facilities, that the Assets Recovery Agency was demanding remittance of the decretal sum and threatening contempt proceedings, and that it stood to suffer substantive loss and reputational harm. None of the respondents filed replies or submissions, though counsel for the second and third respondents supported the application orally. The court, per M'Inoti, Laibuta and Gachoka, JJA, held that section 92(6) of POCAMLA already provides that a forfeiture order does not take effect before the expiry or disposal of an application under section 89 or an appeal under section 96. The motion was therefore unwarranted, amounting to a plea to order obedience to statute law which the court cannot entertain. The application was dismissed with no orders on costs. The decision below was not disturbed; the ruling binds lower courts on the proposition that statutory moratoria displace discretionary stay applications.

Key legal issues

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01

Whether a stay of execution could be granted under rule 5(2)(b) where section 92(6) of POCAMLA already suspends the forfeiture order pending appeal

Holding

The motion was unwarranted because section 92(6) provides the statutory safeguards pending appeal; the court cannot order obedience to statute law.

Reasoning

The court invoked section 92(6) of POCAMLA, which provides that a forfeiture order does not take effect before the period for an application under section 89 or an appeal under section 96 expires, or before such application or appeal is disposed of. Since the applicant's intended appeal fell within that statutory moratorium, the forfeiture order was already suspended by operation of law. A rule 5(2)(b) application was therefore unnecessary and made in disregard of the statute, and the court declined to entertain what was in substance a plea for compliance with statute.

p. 2

Legal principles established

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  • A forfeiture order under POCAMLA does not take effect before the expiry or disposal of an application under section 89 or an appeal under section 96; a party protected by such statutory moratorium cannot seek discretionary stay from the court.
  • The Court of Appeal will not entertain a plea for orders that merely require a party to obey statute.

Court orders

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  1. 1.The applicant's notice of motion dated August 17, 2022 is dismissed with no orders on costs

Authorities

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Legislation

  • Court of Appeal Rulesrule 5(2)(b)
  • Proceeds of Crime and Anti-Money Laundering Act, 2009section 92(6)
  • Proceeds of Crime and Anti-Money Laundering Act, 2009section 89
  • Proceeds of Crime and Anti-Money Laundering Act, 2009section 96
On appeal from
High Court of Kenya at Nairobi
ACEC No. E020 of 2020
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Rafiki Microfinance Bank Limited v Assets Recovery Agency & 2 others", Case Analysis (2022). Civil Appeal (Application) E542 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/1173/eng@2022-10-21

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.