Republic v Zachariah & 2 others (Anti-Corruption Case 35 of 2011) [2020] KEMC 11 (KLR)
The bottom line
#A Kenyan court convicted a contractor and its company of faking an arbitration award to try to claim nearly Kshs 300 million from government.
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 prosecution proved beyond reasonable doubt that the genuine arbitration award issued by Engineer Joseph Theophil Thuo was altered to falsely reflect a sum of Kshs. 97,176,206 for compensating events (making a false document)
- 2.Whether the 1st and 3rd accused knowingly and fraudulently uttered the false arbitration award in enforcement proceedings before the High Court
- 3.Whether the accused attempted to commit a corruption offence (fraud) by attempting to obtain Kshs. 294,443,904 from the Permanent Secretary, Ministry of Special Programmes
- 4.Whether the 1st accused was discriminated against by being charged alone when the company had other Directors
Key legal issues
#Making a false document (Count I)
The arbitration award P. exhibit 2 used in court was not the genuine award of Engineer Joseph Theophil Thuo; it was falsified to introduce Kshs. 97,176,206, and the 1st accused, as the active insider, was its perpetrator
Prosecution witnesses who participated in the arbitration confirmed that the compensating-events claim of Kshs. 97,176,206 never featured before the arbitrator. The arbitrator's secretary disowned both the signature and typing of the disputed document, and the forensic document examiner found the signatures on P. exhibit 2 to be forgeries, differing in font, format, numbering and content from the genuine award. As the accused drove the arbitration and enforcement processes, the court inferred dishonesty and that he falsified the award for a fraudulent purpose.
Uttering a false document (Count II)
Both the 1st accused and Binlaw Construction Company Limited knowingly and fraudulently uttered the false award by filing it in Misc. Civil Application No. 237 of 2009 to obtain a decree
The accused did not deny filing the enforcement application and relying on the false award; his signatures on the supporting and verifying affidavits were confirmed by the document examiner. Having fully participated in the arbitration, he knew the true findings of the arbitrator and was deliberately bent on deceiving the court. Since the crimes were committed for the direct benefit of the company, the company was criminally culpable too.
Attempt to commit a corruption offence (Count III)
The attempt to obtain Kshs. 294,443,904 by falsely pretending the doctored award was valid was proved beyond reasonable doubt against the 1st and 3rd accused
The accused did not stop at demanding payment from the Permanent Secretary; he filed enforcement and judicial review proceedings to compel payment. The Attorney General's Office was initially persuaded to press for settlement before KACC investigators unearthed the fraud. The court held the scheme was only stopped by the intervening discovery of the falsified award, completing the actus reus of attempt.
Corporate liability of directors
Only the 1st accused, the managing director who signed all the documents and drove the process, bore liability; other directors had no evidenced involvement
Applying section 23 of the Penal Code, the court held that directors cannot be liable by status alone and must either have known of the offence or failed to take reasonable steps to prevent it. Investigation revealed no correspondence or board resolution implicating other directors. The discrimination argument therefore lacked merit.
Legal principles established
#- Officers and directors are not criminally culpable for a company's offence by status alone; they may be exonerated where unaware of the offence
- To prove uttering a false document, the prosecution must establish that the document is false, that the accused knew of its falsity, and that he uttered it fraudulently
- Uttering a document is not restricted to physical presentation; it encompasses using or dealing with the document so as to induce another to act upon it
- An attempt is committed where the perpetrator has set in motion the steps towards commission of the offence but is stopped by an intervening circumstance
Court orders
#- 1.Conviction of the 1st accused, John Moguche Zachariah, on Count I (making a false document contrary to section 345 as read with sections 347(b) and 349 of the Penal Code) under section 215 of the Criminal Procedure Code
- 2.Conviction of both the 1st and 3rd accused on Count II (uttering a false document contrary to section 353 of the Penal Code) under section 215 of the Criminal Procedure Code
- 3.Conviction of both the 1st and 3rd accused on Count III (attempt to commit a corruption offence contrary to section 47A(1) of the Anti-Corruption and Economic Crimes Act) under section 215 of the Criminal Procedure Code
- 4.Acquittal of the 2nd accused, Thomas Moturi Oyunge, under section 210 of the Criminal Procedure Code for no prima facie case (at the case-to-answer stage)
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Original criminal jurisdiction over charges under the Penal Code (Cap 63) and the Anti-Corruption and Economic Crimes Act, No. 3 of 2003 (specific statutory provision not stated)
Relief refused
#Defence of discrimination based on non-prosecution of other Directors
No evidence linked the other Directors to the acts complained of; only the 1st accused was an active participant
Defence contention that the award used in enforcement was genuine
The secretary to the arbitrator and the document examiner disowned the signature on the disputed award
Costs
None stated (criminal proceedings)
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.
I am satisfied that the prosecution has proved beyond reasonable doubt the offence of making a false document contrary to section 345 as read with section 347 (b) and 349 of the Penal Code and thus convict the 1st accused in count 1 accordingly.
The second count is proved beyond reasonable doubt. I find him guilty of the offence of uttering false document as charged in count 2.
Consequently, the 1st accused is found guilty in count 1 and convicted under section 215 of the Criminal Procedure Code. Both the 1st and 3rd accused are convicted in counts 2 & 3 under section215 of the Criminal Procedure Code.
The 2nd accused was acquitted under section 210 of the Criminal Procedure Code for reasons given at the case to answer stage.
Most sensationally, P. exhibit 2 introduced into the award a figure of Kshs. 97,176,206 for compensating events which was not in P. exhibit 1 (b).
Issues in the judgment
#The charge in the alternative count refers to section 313 of the Penal Code but the judgment in analysis cites 'section 315 of the Penal Code' as the false pretences provision
The judgment variously records the arbitrator's decision date as 31st October, 2002 and 31st October, 2001
PW 3 is referred to as Josephine Kalondu Musyoki while the Project Manager (PW 1) refers to a Project Engineer Jackeline Musyoki
The alternative charge is stated as section 313 as read with section 389 of the Penal Code, whereas the adjudication analysis describes attempt to obtain by false pretences as contrary to section 315
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Republic v Zachariah & 2 others (Anti-Corruption Case 35 of 2011) [2020] KEMC 11 (KLR)", Case Analysis (2020). Nairobi Chief Magistrate's Anti-Corruption Criminal Case (number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/kemc/2020/11/eng@2020-10-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.