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ELCDismissedNot stated in judgment· [2020] KEELC 2991 (KLR)

Ethics & Anti-Corruption Commission v Katangi Distributors Limited [2020] KEELC 2991 (KLR)

Environment and Land Court
27 April 2020
AOA.O. Ombwayo
1,263 words in judgment
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The bottom line

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Kenya's anti-corruption agency failed to freeze Kisumu land because it didn't prove reasonable suspicion of corrupt acquisition and had a pending case it ignored.

What this practically means

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Executive summary

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The Ethics & Anti-Corruption Commission applied ex parte under section 56 of the Anti-Corruption and Economic Crimes Act for a six-month prohibition order restraining Katangi Distributors Limited from transferring, disposing of, wasting, constructing on, demolishing, charging or otherwise dealing with some twenty-six parcels of land in Kisumu Municipality (Block 7 series) situated on land said to be reserved for the Kenya Railways Corporation. The Commission, through the affidavit of investigator Anderson Weru, alleged that preliminary investigations into the excision and alienation of the land revealed irregular acquisition of public land, that transfer documents were processed on the same day, and that a purported consent was given by a person without authority, while the respondent was actively developing the property. The respondent, through Dipak Panachand Shah, asserted that it is the registered proprietor holding certificates of lease, produced a chain of ownership dating from 1945 through Asembo Trading Company, Alibhai Ramji and Sons, Lake Investments Ltd and Norlake Investments Ltd, and pointed out that the property had been repossessed by Kenya Railways Corporation and that a petition on the same property was pending in court, in which the Commission had been enjoined by consent. A.O. Ombwayo J held that a prohibition order is not automatic and the Commission had not given reasonable grounds to suspect corrupt acquisition, and that the applicant should have pursued the relief in the pending petition. The application was dismissed. No costs order was made.

Key legal issues

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01

Whether reasonable grounds existed to suspect that the suit properties were acquired through corrupt conduct

Holding

The court found that the applicant did not provide reasonable grounds; the respondent's documented chain of ownership from 1945 onwards undermined the claim of irregular acquisition

Reasoning

The Commission relied on preliminary findings that the land was reserved for Kenya Railways Corporation and that title was irregularly acquired. However, the investigator conceded investigations were ongoing, and the respondent produced a chronological chain of leasehold ownership running from Asembo Trading Company through Norlake Investments to Katangi. The court held this fell short of the reasonable suspicion threshold in section 56 of ACECA.

p. 2
02

Whether the court should exercise discretion where a related petition is pending

Holding

The court found the application was filed while a petition concerning the same property was pending, in which the applicant had been enjoined by consent, and the applicant should have pursued the orders in that petition

Reasoning

The court noted the respondent's replying affidavit showing that the property had been repossessed by Kenya Railways Corporation and that a petition was pending, with the applicant enjoined by consent on 7 October 2019. The court held the Commission should have directed its energies to the petition rather than bringing a parallel ex parte application, as granting the orders risked pre-empting the pending dispute.

p. 2

Legal principles established

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  • A prohibition order under section 56 of ACECA is not automatic; the Commission must give reasonable grounds for the court to suspect the property was acquired through corrupt conduct

Court orders

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  1. 1.The application for a prohibition order under section 56 of ACECA was declined; the orders sought were refused

Authorities

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Legislation

  • Ethics and Anti-Corruption Commission ActSection 23
  • Anti-Corruption and Economic Crimes ActSection 56
  • Government Lands ActNot specified
  • Physical Planning ActNot specified
Jurisdiction invoked
Section 56 of the Anti-Corruption and Economic Crimes Act, No. 3 of 2003 (ex parte prohibition order jurisdiction of the High Court)

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, "Ethics & Anti-Corruption Commission v Katangi Distributors Limited [2020] KEELC 2991 (KLR)", Case Analysis (2020). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/2991/eng@2020-04-27

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