Kundu v Assets Recovery Agency (Civil Appeal (Application) E521 of 2022) [2025] KECA 76 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that appealing a forfeiture order does not automatically freeze it—you must separately apply for a stay, and delay can kill that application.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether section 92(6) of the Proceeds of Crime and Anti-money Laundering Act grants an automatic stay of a forfeiture order upon the filing of an appeal
- 2.Whether the applicant has met the criteria for grant of stay of execution pending appeal under Rule 5(2)(b), including whether the appeal is arguable and whether it would be rendered nugatory without stay
Key legal issues
#Effect of section 92(6) of the Proceeds of Crime and Anti-money Laundering Act on appeals against forfeiture orders
Section 92(6) delays the taking effect of a forfeiture order only pending an application under section 89 or an appeal under section 96. The applicant received notice, participated in the forfeiture proceedings, and his appeal is not an appeal under section 96; therefore no automatic stay arises.
The court construed subsection 6(a) and (b) as referring expressly and by the word 'such' to an appeal under section 96, which is an exclusion-of-interests remedy for persons entitled to notice who did not receive it. The applicant received notice, answered the application and participated in its hearing, so section 96 is inapplicable and section 92(6) cannot be invoked for automatic stay.
Whether the appeal is arguable for purposes of Rule 5(2)(b)
At least one arguable point exists, concerning third-party interests in some of the forfeited assets and whether the finding that the interested parties were proxies of the applicant is supported by the evidence.
The court declined to make determinative findings on the grounds of appeal, leaving that to the full hearing, but identified the argument on third-party interests as arguable rather than frivolous, warranting scrutiny by an appellate court.
Whether the appeal would be rendered nugatory without stay and whether delay disentitles the applicant
The application failed because it was brought over two years after the vesting order took effect without explanation for the inordinate delay, and there was no evidence of mismanagement or dissipation; any loss could be compensated by damages.
The court held that lengthy and unexplained delay suggested the application was an afterthought, that the applicant raised no apprehension about the respondent's management capacity when the vesting order took effect, and that damages are an adequate remedy for any loss from mismanagement.
Legal principles established
#- Section 92(6) of the Proceeds of Crime and Anti-money Laundering Act defers the taking effect of a forfeiture order only in respect of an application under section 89 or an appeal under section 96, and does not operate as an automatic stay where an aggrieved party who participated in the forfeiture proceedings lodges a general appeal
- An affidavit containing substantial hearsay dispositions may be disregarded, and grounds of opposition are not a recognised way of answering an application before the Court of Appeal under the Court of Appeal Rules 2022
Court orders
#- 1.The notice of motion dated 29th May 2024 is dismissed with costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules 2022 (stay of execution pending appeal)
Relief refused
#Stay of execution of the High Court forfeiture judgment and decree pending appeal
Section 92(6) does not confer an automatic stay on an appeal of this kind; the application was filed over two years after the vesting order took effect with no explanation for the delay; and the appeal would not be rendered nugatory as any loss through mismanagement is compensable in damages
Costs
The notice of motion dated 29th May, 2024 is hereby dismissed with costs.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The appeal protected by subsection (b) is not an appeal of any kind but specifically an appeal under section 96.
Section 96 is inapplicable and the applicant cannot call in aid the provisions of section 92(6) of the Act to rally for automatic stay.
Such lengthy and unexplained delay is perhaps evidence that the application is simply an afterthought and the fear that the appeal will be rendered nugatory if not protected by stay is not well founded.
The notice of motion dated 29th May, 2024 is hereby dismissed with costs.
Issues in the judgment
#The judgment recites that the respondent's replying affidavit and grounds of opposition were disregarded in their entirety, yet the court nonetheless sets out and addresses the respondent's assertions and submissions based on that material, creating some tension in the reasoning
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kundu v Assets Recovery Agency (Civil Appeal (Application) E521 of 2022) [2025] KECA 76 (KLR)", Case Analysis (2025). Not stated in judgment (notice of motion dated 29th May 2024). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/76/eng@2025-01-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.