Sonko wins as Court of Appeal rejects bid to freeze Sh537 million

Former Nairobi Governor Mike Sonko/HANDOUT

The Court of Appeal has declined to grant the Assets Recovery Agency (ARA) a stay of execution in its bid to stop the release of funds held by former Nairobi Governor Mike Sonko.

In its directions delivered by a bench, it said it lacked jurisdiction to stay a “negative order” issued by the High Court.

With the Court of Appeal now declining to stay the High Court order, the combined effect of the rulings is that the restrictions that had previously limited access to Sonko’s bank accounts have been significantly eased, at least for now, as the legal battles continue in court.

The agency had filed an application seeking to suspend a High Court decision delivered by Justice Nixon Sifuna on October 1, 2025, that dismissed ARA’s forfeiture suit with costs and ordered the discharge of preservation orders.

The High Court had dismissed ARA’s petition, ruling that the evidence presented was insufficient to prove that the funds in former Governor Mike Sonko’s accounts were proceeds of crime.

Justice Nixon cited selective investigation, lack of witness statements, and unverified property sale documents, noting the agency failed to meet its burden of proof.

In its ruling delivered on November 14, 2025, tribunal member Dr. Rodney O. Oluoch held that the taxes cited in the agency notices were disputed and had not yet been determined.

The tribunal ruled that the amounts were therefore not collectible pending the hearing and determination of the tax appeal, meaning KRA could not enforce the agency notices or recover the contested tax amounts from Sonko’s accounts while the tax dispute remains unresolved.

In the present application, the three-judge bench, comprising Justices Kathurima M’inoti, Chacha Mwita, and Bryam Ongaya, held that there was nothing that could be stayed under Rule 5(2)(b) of the Court of Appeal Rules.

Justice M’inoti, who led the bench, sought clarification from ARA’s counsel on what exactly the agency was seeking to suspend.

“What you are seeking is a stay of execution based on the decision of Justice Sifuna,” he observed.

“In the judgment, in the pertinent part, he says, ‘In consequence, this suit fails and is hereby dismissed with costs.’ You are aware of consistent decisions of this Court that it cannot issue an order of stay of execution in respect of a dismissal.”

He emphasised that the appellate court has, in about ten previous decisions, maintained that it cannot stay a negative order — one that does not command a party to do or refrain from doing anything, but simply dismisses a claim.

Senior Counsel Harrisson Kinyanjui, representing the ex-governor, when pressed by the bench, conceded that he had made similar submissions and acknowledged the court’s established jurisprudence.

However, ARA’s counsel Esther Muchiri urged the court to consider Section 97 of the Proceeds of Crime and Anti-Money Laundering Act (POCAMLA), arguing that once an appeal is filed, preservation orders automatically subsist pending its determination.

She maintained that the funds in question, preserved since February 2020, should remain untouched as they are the subject of the main appeal.

But Justice M’inoti was quick to point out the contradiction.

“If it is automatic under Section 97, then your application is not necessary,” he said, reiterating that the court was only dealing with an application for stay under Rule 5(2)(b), not an interpretive question on the statute.

Justice Chacha Mwita further pressed the agency’s counsel: “We can only stay the decision of the superior court. But that decision dismissed your suit. So what is it you want us to stay?”

Muchiri responded that the agency was seeking to prevent withdrawal of the funds pending appeal.

The bench, however, maintained that they could not stay a dismissal order and that Section 97 did not clothe them with jurisdiction in the present application.

The judges gave ARA the option of withdrawing the application or having it formally dismissed with costs.

After brief consultations and noting the court’s position, Muchiri opted to withdraw the application “subject to the court’s guidance and in view of Section 97.”

Kinyanjui indicated he had no objection to the withdrawal but urged that no reference be made to Section 97 in light of the Rule 5(2)(b) framework. He also sought costs.

The bench declined to delve into the applicability of Section 97, stating it would not be drawn into that debate within the confines of the withdrawn motion.

The only outstanding issue, the judges said, was on costs of the application, with a ruling set for March 13, 2026.