Mbogo t/a Sahara Consultants & 5 others v Assets Recovery Agency (Civil Appeal E221 of 2020) [2026] KECA 1534 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed the State can seize bank funds as proceeds of crime even if criminal charges were withdrawn.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the respondent (Assets Recovery Agency) had locus standi to institute the proceedings for preservation orders and forfeiture orders against the appellants, given that sections 82(1) and 90(1) of POCAMLA vest the power in the Agency Director.
- 2.Whether the High Court erred in holding that the funds in the appellants' bank accounts were proceeds of crime hence liable to forfeiture.
- 3.Whether the subject proceedings as against the 1st appellant contravened her right to fair trial and amounted to abuse of court process.
- 4.Whether the appellants can be deprived of their property in the circumstances having regard to the rule against doubtful penalisation.
- 5.Whether the proceedings against the 5th and 6th appellants, being minors at the time, were proper.
Key legal issues
#Whether ARA (as distinct from the Agency Director) had locus standi to institute the preservation and forfeiture proceedings.
Proceedings lodged in the name of ARA are competent; the misnomer is an apparent formal infraction that cannot render forfeiture proceedings fatally defective.
Sections 82(1) and 90(1) confer the application power on the Agency Director, but section 2 distinguishes the Agency from its Director, section 53(1) clothes ARA with capacity to sue and be sued, and section 53(5) permits anything the Director is authorised to do to be done by Agency staff with his authorisation. Following Mangira, where the Originating Motion and supporting affidavit were signed by the then Director, naming ARA instead of the Director is an apparent formal infraction that cannot render forfeiture proceedings fatally defective; the authorities demonstrate the interchangeability of the two.
Whether the proceedings against the minor appellants were improper for want of a guardian ad litem.
The minors were ably represented by the 1st appellant, who opened and operated their accounts and possessed the funds; the complaint had no merit.
The 1st appellant admitted in her recorded statement and confirmed in her replying affidavit that she opened and operated the accounts of the minor appellants, who are her children, and that she was duly authorised to respond to the forfeiture application on behalf of all the appellants. The funds in the minors' accounts were therefore in her possession and control. The court held that to require more, in those circumstances, would be an exercise in impermissible hair-splitting, and found no merit in the complaint about the competence of the proceedings against the minors.
Whether the withdrawal of the criminal charges against the 1st appellant, and the absence of a conviction, defeated the civil forfeiture proceedings.
Civil forfeiture requires a nexus between the property and a crime, but neither the withdrawal of charges nor an acquittal insulates the property from forfeiture, by force of section 92(4).
Applying the Supreme Court's decision in Ethics and Anti-Corruption Commission & another v. Aboo, the court affirmed that ARA must establish a nexus between the subject matter of forfeiture and a crime or its intended commission, but neither an acquittal nor the absence of a sustainable charge insulates property from forfeiture. Section 92(4) expressly provides that the validity of a forfeiture order is not affected by the outcome of criminal proceedings or investigations. The charges against the 1st appellant having been withdrawn, the court held that so long as a plausible bona fide charge existed, the outcome was inconsequential.
Whether ARA proved on a balance of probabilities that the funds in the appellants' accounts were proceeds of crime, and on whom the burden of proving legitimacy of source lay.
ARA discharged its burden on a balance of probabilities; the unexplained, structuring-pattern cash deposits supported forfeiture under section 92(1).
The burden lies first on ARA to establish the nexus on a balance of probabilities, whereupon the evidential burden shifts to the person asserting a legitimate source. The deposits were made in tranches below the reporting threshold, often several on the same day across multiple accounts. The alleged Siaya farm was found not to exist, the 1st appellant's tax returns for 2015-2018 disclosed no farming income, and no deposits were made into the husband's Nile International account during the relevant years. The explanations were therefore not credible and the funds were proved to be proceeds of crime.
Legal principles established
#- Preservation and forfeiture proceedings under POCAMLA are competently instituted in the name of the Assets Recovery Agency; the omission to name the Agency Director as applicant is a formal infraction that does not vitiate the proceedings.
- Civil forfeiture under Part VIII of POCAMLA is independent of criminal proceedings: the withdrawal, acquittal or outcome of criminal charges does not insulate suspect property from forfeiture, so long as a plausible bona fide criminal charge existed, as section 92(4) expressly provides.
- Where ARA establishes suspicious, unexplained deposits on a balance of probabilities, the account holder must credibly explain the legitimate source of the funds; failure to do so supports a finding that the funds are proceeds of crime liable to forfeiture under section 92(1).
- Minors whose accounts are opened, operated and controlled by a parent in possession of the funds are competently before the court in forfeiture proceedings through that parent; the absence of a guardian ad litem is not fatal.
Court orders
#- 1.The appeal is dismissed ('we find this appeal to be without merit and we dismiss it with costs. Order accordingly.').
- 2.Costs of the appeal awarded to the respondent, the Assets Recovery Agency, with the consequence that the High Court's declaration that the funds are proceeds of crime and the forfeiture orders of 15th April 2020 stand.
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi, Anti-Corruption and Economic Crimes Division
- ACEC Application No. 58 of 2018
- Jurisdiction invoked
- First appellate jurisdiction of the Court of Appeal over a High Court decision; the judgment does not cite a specific constitutional or statutory provision for the appeal, proceeding instead 'in obedience to our duty as a first appellate court to proceed by way of re-hearing the case' (invoking Selle v. Associated Motor Boat Company Ltd).
Relief refused
#Declaration that the preservation and forfeiture proceedings were a nullity for want of locus standi, having been lodged by ARA rather than the Agency Director
Naming ARA instead of the Agency Director is a formal infraction that can be ignored; section 53(1) gives ARA capacity to sue and be sued, section 53(5) permits delegation of the Director's functions to Agency staff, and the authorities demonstrate the interchangeability of the two.
Finding that the proceedings against the 5th and 6th appellants (minors) were incompetent and a nullity
The 1st appellant opened and operated the minors' accounts and possessed and controlled the funds; she confirmed parentage and authority to respond on behalf of all the appellants; requiring a guardian ad litem would be impermissible hair-splitting.
Argument that the withdrawal of the criminal charges against the 1st appellant defeated the forfeiture proceedings
Section 92(4) of POCAMLA expressly delinks civil forfeiture from the outcome of criminal proceedings; it suffices that a plausible bona fide criminal charge existed.
Setting aside of the forfeiture and declaration orders on the merits
ARA established the nexus between the funds and crime on a balance of probabilities; the appellants gave no credible explanation for the multiple large cash deposits, the alleged farming business was non-existent, and the tax returns disclosed no farming income.
Costs
The appeal was dismissed with costs to the respondent, the Assets Recovery Agency: 'we find this appeal to be without merit and we dismiss it with costs.' (The site-visit application at the High Court had also been dismissed with costs to ARA.)
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.
we find this appeal to be without merit and we dismiss it with costs. Order accordingly.
It is thus our finding, notwithstanding Mr. Omollo's tempting submissions to the contrary, that preservation proceedings and forfeiture proceedings can be lodged as well under the name of ARA as of the Agency Director.
Accordingly, the apparent formal infraction in the Originating Motion by naming the respondent as the applicant cannot render the forfeiture proceedings fatally defective.
It is therefore a requirement that the ARA has to establish a nexus between the subject matter of forfeiture and a crime or its intended commission when seeking an order of forfeiture.
We are of the view that so long as there existed a plausible bona fide criminal charge, the outcome of the criminal proceedings was inconsequential.
If the person adduces evidence to the satisfaction of a court on a balance of probabilities, that such a set of facts exists, the burden of proving otherwise shifts to the person against whom the allegation is made.
Nothing comes out of nothing and our evaluation of the evidence in this matter leads us to the unerring and inescapable conclusion that ARA established on a balance of probabilities that the funds in the subject accounts were proceeds of crime.
We, in the circumstances, do not find it plausible that the significant cash deposits were derived from the alleged farming business, which we respectfully think were non-existent or a mere phantom.
we find that the minors were ably represented, by the very person who was in possession of the funds in question, the 1st appellant.
in obedience to our duty as a first appellate court to proceed by way of re-hearing the case with a view to making our own inferences of fact and arriving at independent conclusions after a fresh and exhaustive re-appraisal and analysis of the entire evidence
Issues in the judgment
#The condensed list of issues refers to the 5th and 6th 'respondents' although they are appellants in this appeal.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mbogo t/a Sahara Consultants & 5 others v Assets Recovery Agency (Civil Appeal E221 of 2020) [2026] KECA 1534 (KLR)", Case Analysis (2026). Not stated in the judgment (appeal against the decision in Nairobi High Court ACEC Application No. 58 of 2018). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1534/eng@2026-07-31
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.