Assets Recovery Agency v EIS Afrika Group Ltd

appellant's submissions were served upon the respondent's advocates on 4th March 2026, after the respondent had led its submissions. Counsel for the respondent raised the issue of late service but did not seek an adjournment. The appeal therefore proceeded to hearing on the merits. 4. The facts giving rise to the appeal are largely undisputed. The appellant, a statutory body established under POCAMLA, received information concerning suspected money laundering involving the respondent's account at I&M Bank. On or about 1st March 2024, the account received USD 350,000 from a foreign jurisdiction. Following investigations, the appellant obtained preservation orders and subsequently led the Originating Motion seeking forfeiture of the balance of USD 274,369.56 remaining in the account. 5. The appellant's case before the High Court was that the funds were proceeds of money laundering. The supporting adavit of Alfred Musalia, an investigator with the appellant, stated, among other things, that the Agency had received information concerning suspected money laundering, opened an inquiry le, obtained warrants to investigate the respondent's accounts and established, in its view, that the respondent had executed a money-laundering scheme designed to conceal the nature, source, disposition and movement of illicit funds. 6. The respondent opposed the application through the replying adavit sworn by Nduwimana Aimable, who described himself as the sole member and director of the respondent and stated that he was competent and duly authorised to swear the adavit on its behalf. He explained that the respondent was incorporated in Kenya and was an aliate of EIS Company SPRL, Burundi. He further explained that the companies operated under the same directorship and management and that EIS Burundi was engaged in civil engineering, including road, bridge and construction works. 7. Mr. Nduwimana's explanation was that EIS Burundi had successfully bid for construction works and installation at the Kavimvira Border Post, which he described as being in the South Kivu Province of Burundi and serving the border between Burundi and the Democratic Republic of Congo, at a contract value of USD 5,033,576.15. The respondent's case was that the project was funded by the World Bank and that, owing to diculties concerning foreign exchange and importation in Burundi, funds were routed through the respondent's Kenyan account to facilitate procurement of equipment and vehicles from Dubai. The respondent produced documents in support of that explanation, including tender documents, invoices and correspondence. 8. The appellant subsequently led a further adavit sworn by Alfred Musalia in which it challenged the authenticity and credibility of the documents relied upon by the respondent. In particular, it questioned the authenticity of the alleged World Bank email communication and relied upon a cyber forensic report attributed to the Communications Authority of Kenya. 9. The learned Judge, having considered the material before him, dismissed the application. The learned Judge found that the appellant had not established a prima facie case and was particularly critical of the manner in which the investigation had been presented to the Court. He noted that the supporting adavit alleged that the respondent had made huge cash withdrawals, yet the bank statements did not disclose such withdrawals. The learned Judge further questioned the evidential basis of the cyber forensic report relied upon by the appellant. He also held that, even if a prima facie case had been established, the respondent had suciently explained the source and destination of the funds. 10. Before us, the appellant contends that the learned Judge misdirected himself on the applicable burden of proof. It is submitted that the appellant was not required to establish a direct connection between the funds and a specic criminal oence; that the suspicious movement of the funds, coupled with the unveriable email address and the respondent's explanation, was sucient to shift the evidential burden; and that the learned Judge placed an excessively onerous burden upon the appellant. The https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1739/eng@2026-09-25 2

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appellant further contends that the learned Judge improperly relied on inadmissible evidence and failed to appreciate that the proceedings were in rem. 11. For the respondent, it is submitted that the learned Judge properly evaluated the evidence and correctly found that the appellant had failed to establish the requisite connection between the funds and criminal conduct. The respondent maintains that the appellant's case rested substantially on suspicion, that the alleged cash withdrawals were not supported by the bank statements, and that the respondent had provided a documentary explanation of the source and intended use of the funds. The respondent accordingly urges us to uphold the decision of the High Court. 12. This being a rst appeal, our mandate is to reconsider and re- evaluate the evidence on record and draw our own conclusions, bearing in mind that we did not see or hear the witnesses and giving due allowance for that fact, we must therefore determine whether the learned Judge arrived at the correct conclusions upon the evidence and whether she properly applied the law to that evidence. See Selle & Another v Associated Motor Boat Co. Ltd & Others [1968] EA 123. 13. The principal question arising for our determination is whether the learned Judge erred in nding that the appellant had not established the threshold necessary to warrant forfeiture of the funds under sections 90 and 92 of POCAMLA. 14. Section 92(1) of POCAMLA provides that the High Court shall make an order applied for under section 90(1) if it nds, on a balance of probabilities, that the property concerned has been used or is intended for use in the commission of an oence or is proceeds of crime. The proceedings are civil in nature, and the applicable standard of proof is therefore the balance of probabilities. In Assets Recovery Agency v Abdallah Ali Ibrahim [2020] eKLR, the High Court underscored that the Agency bears the legal burden of proving that the subject property constitutes proceeds of crime, and mere suspicion or unusual transactional activity cannot, by itself, discharge this burden. 15. The legal burden of establishing the case remains upon the party asserting the relevant facts. In the context of civil forfeiture under POCAMLA, that burden rests upon the Agency. The evidential burden may, however, shift in the course of the proceedings where the Agency has adduced evidence sucient to warrant a rebuttal or explanation from the person in possession of the property. 16. That position has recently been authoritatively claried by the Supreme Court in Ethics and AntiCorruption Commission & another v Pamela Aboo, SC Petition Nos. E044 and E046 of 2024 (Consolidated) [2026] eKLR, judgment delivered on 19th June 2026. The Supreme Court held that forfeiture under POCAMLA can only be made against property associated with the commission of a crime or constituting proceeds of crime. It follows that the Agency must establish, on a balance of probabilities, a nexus between the property sought to be forfeited and a crime or its intended commission. The Court further held that where the Agency adduces credible evidence sucient to warrant a rebuttal, the evidential burden may shift to the person against whom the allegation is made. 17. The Supreme Court also made clear that there is no xed or uniform formula for determining what constitutes a reasonable explanation by a respondent. The adequacy of the explanation depends upon the particular case and the evidence placed before the Court by the Agency. Crucially, the Supreme Court found in Pamela Aboo that ARA had failed to prove the requisite nexus and had therefore not established a credible case for forfeiture under POCAMLA. 18. In our view, the eect of that decision is not that the Agency must prove the commission of a specic criminal oence or obtain a criminal conviction before civil forfeiture can be ordered. Section 92(4) POCAMLA makes that clear. Nor does it mean that every item of property must be traced through every stage of a criminal enterprise. What is required is evidence sucient to establish, on a balance of https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1739/eng@2026-09-25 3

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probabilities, that the property sought to be forfeited is associated with criminal conduct in the manner contemplated by POCAMLA. 19. It follows that the mere fact that a transaction is unusual, large or international does not, without more, establish that the funds are proceeds of crime. Suspicion may properly trigger an investigation; it does not, by itself, discharge the evidential burden necessary for forfeiture. 20. We have therefore re-evaluated the evidence relied upon by the appellant. The starting point is the USD 350,000 transfer into the respondent's account. There is no dispute that the transfer occurred. The appellant was entitled to regard the transfer as a matter warranting investigation. The question, however, is whether the evidence placed before the High Court established the necessary nexus between that money and criminal conduct. 21. The supporting adavit of the appellant's investigator contains general assertions that investigations had established a money- laundering scheme and that the funds constituted proceeds of crime. What is less apparent from the adavit is the evidential material upon which those conclusions were based. The learned Judge was therefore entitled to examine the underlying evidence rather than simply accept the investigator's conclusion that the funds were proceeds of crime. 22. Of particular signicance is the allegation concerning huge or massive cash withdrawals. The bank statements relied upon by the appellant did not, upon our own examination of the record, substantiate that allegation. More importantly, when counsel was specically questioned about the alleged withdrawals, he conceded that describing them as massive was “a slip of our side.” The learned Judge was therefore entitled to treat that allegation as a weakness in the appellant's evidential case. The signicance of the error is not that an inaccurate description in an adavit automatically defeats a forfeiture application, but that the allegation was relied upon as part of the basis for characterising the transactions as suspicious and was not supported by the very records relied upon by the appellant. 23. The appellant also relied substantially upon the alleged World Bank email. The evidence placed before the High Court was that the email address could not be veried and that a cyber forensic report was relied upon in support of that conclusion. The question for us is whether that evidence established that the underlying project or source of funds was ctitious or criminal. 24. We do not think it did. The failure to verify an email address may reasonably raise a question concerning the authenticity of that particular communication. It does not, without further evidence, establish that the underlying contract did not exist, that the World Bank did not fund the project, or that the funds transferred to the Respondent were proceeds of crime. 25. We consider this particularly important because the respondent did not merely deny the allegations. Through the adavit of Mr. Nduwimana, the respondent put forward a specic account of the source and intended use of the funds and produced documentation relating to the alleged corporate relationship, the construction project, the tender, the transfer of funds and the subsequent procurement transactions. The respondent's explanation was therefore capable of being investigated and independently veried. 26. The record further shows that counsel for the appellant was asked whether the Agency had independently veried the contract or project with the World Bank or the Burundi Embassy. The response was, in substance, that the investigation had not proceeded to that level because the email address supplied by the respondent had failed verication. That evidence was material to the learned Judge's assessment of the quality of the investigation. 27. We agree with the learned Judge that the failure to undertake further independent verication weakened the appellant's case. Once the respondent had placed before the Court a specic and https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1739/eng@2026-09-25 4

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objectively veriable explanation for the source of the funds, the question was not simply whether the respondent's documents raised suspicion. The Agency still bore the legal burden of establishing the statutory nexus between the funds and criminal conduct. 28. We must, however, qualify the learned Judge's observation that the appellant's failure to verify the World Bank documents amounted, in itself, to a “failure of duty”. The issue before us is not whether the Court approves of the investigative choices made by the Agency in the abstract. The relevant question is whether those investigative deciencies left the evidence insucient to establish forfeiture on a balance of probabilities. In our assessment, they did. 29. We have also considered the cyber forensic report attributed to the Communications Authority of Kenya. The appellant's complaint is that the learned Judge improperly rejected the report on evidentiary grounds. In our view, it is unnecessary to determine the wider proposition that a report from a public body is inadmissible merely because the body itself is a juristic person. The narrower and sucient question is whether the report, in the form in which it was placed before the Court, established the disputed facts upon which the appellant relied. 30. The report was attributed to an unnamed analyst and was relied upon through the investigator's adavit. The evidential foundation for the analyst's conclusions was not satisfactorily established. We therefore agree with the learned Judge that the report could not, standing alone, carry the weight which the appellant sought to place upon it. The issue is not that electronic evidence is inherently inadmissible, but that the particular evidence relied upon had not been suciently established to prove the critical proposition for which it was tendered. 31. We have also considered the appellant's objection, raised for the rst time before this Court, to the respondent's documents on the ground that some were in French and had not been translated or authenticated. The record does not demonstrate that this objection was raised before the High Court. On the contrary, the proceedings show that the respondent was granted leave to respond to the appellant's further adavit and that the matter thereafter proceeded to judgment. 32. We therefore agree with the learned Judge's ultimate conclusion on the evidence, although we would put the matter more narrowly. A party should not ordinarily be permitted to raise on appeal a new evidential objection requiring factual inquiry which was not raised before the trial court and upon which that court was consequently not called upon to rule. We accordingly do not nd merit in that ground of appeal. 33. There is, admittedly, a discrepancy in the documentation concerning the project, including the references to Burundi, South Kivu and the Democratic Republic of Congo. The contract acceptance letter referred to in the record is addressed from the Democratic Republic of Congo Ministry of Infrastructure and Public Works to Group EIS, while the respondent's explanation relates the project to the border between Burundi and the Democratic Republic of Congo. 34. That discrepancy is a legitimate matter of concern. It does not, however, by itself establish that the project was ctitious or that the funds were proceeds of crime. More importantly, it was a matter capable of independent verication. The appellant could have sought conrmation from the relevant institutions or the alleged funding institution. Having elected not to undertake such verication, it could not simply invite the Court to treat the discrepancy as proof of criminal provenance. 35. We are also not persuaded by the submission that the in rem character of the proceedings lowered the evidential threshold applicable to the appellant. It is correct that civil forfeiture proceedings are directed against property and do not require a criminal conviction against the owner. But the property must nevertheless satisfy the statutory conditions for forfeiture under POCAMLA. The in rem nature https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1739/eng@2026-09-25 5

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of the proceedings determines the subject of the proceedings; it does not alter the standard of proof prescribed by section 92(1) of POCAMLA. This principle was aptly captured in Assets Recovery Agency v Tsavorite Holdings Limited [2021] eKLR, where the court emphasized that although civil forfeiture proceedings are in rem, the Agency must still establish a direct nexus between the property and criminal conduct, and cannot rely on the statutory objectives of the Act to lower the evidential threshold required for forfeiture. 36. Nor does the statutory objective of combating money laundering permit the Court to dispense with proof of the statutory elements of forfeiture. The purpose of POCAMLA is undoubtedly important, but the exercise of the State's power to deprive a person of property must remain within the framework prescribed by the Act and the Constitution. 37. The appellant submitted that the respondent's explanation was itself suspicious, particularly because the funds were said to have been routed through Kenya for procurement purposes. We do not accept that submission. The fact that the respondent's explanation may appear unusual does not relieve the appellant of its legal burden. Indeed, the Supreme Court's decision in Pamela Aboo makes clear that the adequacy of a respondent's explanation must be considered in the context of the evidence adduced by the Agency and that the burden may return to the Agency where the explanation is credible enough to raise doubt. 38. Upon our own re-evaluation of the record, we are satised that the learned Judge was entitled to nd that the appellant had not established the evidential threshold necessary to shift the evidential burden to the respondent in the manner contended for by the appellant. The evidence established circumstances that warranted investigation, but it did not establish on a balance of probabilities that the USD 274,369.56 remaining in the respondent's account constituted proceeds of crime. 39. We reach that conclusion without placing upon the respondent the burden of proving its innocence. We have considered the respondent's explanation because it forms part of the evidential record and because the appellant's case directly challenged the source of the funds. The explanation was supported by documents and was not suciently displaced by the appellant's evidence. 40. We are therefore satised that the learned Judge reached the correct result. The substance of the learned Judge's nding that the appellant had not established the requisite evidential basis for forfeiture is supported by our own independent evaluation of the record and is consistent with the law as now authoritatively stated by the Supreme Court. 41. From the foregoing, we accordingly nd no merit in the appeal. The appeal is dismissed. The judgment and decree of the High Court dated 20th June 2025 are hereby upheld. The respondent shall have the costs of this appeal. Order accordingly. DATED AND DELIVERED AT NAIROBI THIS 25TH DAY OF SEPTEMBER, 2026. L. ACHODE ............................... JUDGE OF APPEAL R. NGETICH ............................... JUDGE OF APPEAL https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1739/eng@2026-09-25 6

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RADIDO S. OKIYO ............................... JUDGE OF APPEAL I certify that this is a true copy of the original. Signed DEPUTY REGISTRAR https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1739/eng@2026-09-25 7

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