The applicant, Assets Recovery Agency, has brought originating motion dated 30 th January 2025 under Sections 81, 90 and 92 of the Proceeds of Crime and Anti-Money Laundering Act (hereinafter referred to as POCAMLA). The motion seeks that this court declares the following funds and all interest accrued thereon to be proceeds of crime and forfeit them to the Government through the applicant;
a. United States Dollars 949,463.41 held in account number 0102257000041 in the name of Mose and Company at Sidian Bank Limited.
b. Kshs 2,469,558.00 held in account number 01022570000031 held in the name of Mose and Company held at Sidian Bank Limited.
The application is opposed through a replying affidavit sworn on 2 nd May 2025 by the respondent’s managing partner, one Stephen Mose. The interested party filed a notice of motion dated 16 th September 2025 seeking leave to participate in these proceedings and exclusion of the preserved funds from forfeiture and instead the funds be released to it through its advocates. On 3 rd February 2026, the interested party was joined to the suit and the court directed that its application and supporting affidavit would constitute its response to the originating motion.
The applicant's case
The originating motion is accompanied by supporting and further affidavits sworn on 30 th January 2025 and on 15 th April 2026 respectively by an investigator attached to the applicant by the name Benard Gitonga. He states that on 19 th September 2024, the applicant received information concerning a suspected fraud involving sale of raw tantalite niobium ore (hereinafter referred to as ‘the ore’) following which an inquiry file was opened and warrants to investigate and restrict the relevant accounts were obtained on 20 th September 2024 in Milimani Chief Magistrate's Court miscellaneous civil application No. E1114 of 2024.
The applicant adds that the interested party, a company based in the People's Republic of China, entered into commercial arrangements with Sanjola Limited (hereinafter referred to as ‘Sanjola’) for purchase and export of the ore. The respondent was appointed to receive and hold the purchase money as an escrow agent. USD 1,000,000 was remitted to the respondent's account on or about 29 th December 2023 but the contracted ore was never delivered.
According to the applicant, investigations established that a container identified as TCLU8755716 entered Kenya from Uganda through Malaba. The goods were later handled at a container terminal in Mombasa and were cross-stuffed into containers identified as numbers SEGU2490020 and TEMU0281304. The cargo which reached China was examined and found to consist of ordinary soil or mud rather than the contracted ore. The container seals and recorded weights were also said to differ from the particulars represented to the interested party.
The investigator states that the applicant recorded statements from the interested party's representative and a partner in the respondent firm and obtained bank records from Sidian Bank Limited which showed receipt of the remitted purchase money into the respondent's escrow or client account and part of it was later moved to the two cash margin accounts which are now preserved.
The applicant’s further affidavit states that the underlying inquiry concerns the offence of obtaining money by false pretences contrary to Section 313 of the Penal Code and related money-laundering offences. The further affidavit traces the movement of the containers from Uganda through Kenya to China and repeats that the cargo delivered was valueless soil. It also states that the transaction was structured to give the appearance of a genuine international mineral trade while concealing a fraudulent scheme.
The applicant maintains that the preserved money is property obtained as a direct result of fraud. It argues that the fact that the money originated from the interested party does not prevent it from becoming proceeds of crime once it was obtained by false representations and placed under the control of persons involved in the transaction. It therefore asks the court to declare the funds as proceeds of crime and forfeit them to the Government.
The respondent's case
In its replying affidavit, the respondent admits that it was instructed to act as an escrow stakeholder in the transaction between Sanjola and the interested party. It received the purchase money into its account but states that it did so in its professional capacity and strictly subject to the escrow instructions given by the contracting parties.
The respondent denies that it was a party to the underlying contract for supply of the ore. It also denies participation in any false representation concerning the source, quality, shipment, weight or delivery of the mineral cargo. It states that it neither sold the goods nor inspected the containers and could not guarantee performance by Sanjola. It further states that it does not have a beneficial interest in the preserved principal sum. The respondent adds that its only possible interest is in professional fees and expenses lawfully incurred in the course of the retainer. It denies collusion, fraud, concealment, layering or any other act of money laundering and states that it has cooperated with the investigators.
The interested party's case
The interested party’s application prays as follows;
1. THAT Yingcheng (Shenzhen) International Trade Co. Limited be and is hereby joined to these proceedings as an Interested Party.
2. THAT a total sum of USD 949,453 held at Sidian Bank, Cash Margin Account Number: 01022570000041 (USD) and Kshs 2,469, 558 held at Sidian Bank, Bank, Cash Margin Account Number: 01022570000031 (Kshs) both in the name of Mose and Company be and is hereby excluded from forfeiture.
3. THAT a total sum of USD 949,453 held at Sidian Bank, Cash Margin Account Number: 01022570000041 (USD) and Kshs 2,469, 558 held at Sidian Bank, Cash Margin Account Number: 01022570000031 (Kshs) both in the name of Mose and Company be released to Gracen Law Advocates, the advocates for Yingcheng (Shenzhen) International Trade Co. Limited forthwith.
4. Costs of the application.
5. Any further or other orders the Court may deem just and fit to grant in the circumstances.
Wu Jilin, also known as Mitchelle Wu, gives on behalf of the interested party a detailed chronology of the transaction and maintains that the interested party is a victim of an international commercial fraud rather than an accomplice or beneficiary of crime. He states that the interested party was introduced to persons who represented that they could supply the ore to China from the Democratic Republic of Congo through Uganda and Kenya. There had been an earlier unsuccessful transaction through persons associated with an entity he refers to as Euro Space in which part of the purchase money was refunded but some remained withheld.
The interested party adds that, it first paid USD 10,000 to the escrow account operated by the respondent and on 2 nd October 2023 entered into an agreement for an initial shipment. A further USD 280,000.00 was remitted on or about 8 th October 2023. The deponent avers further that because of concerns about the transaction, the interested party obtained assistance to verify the cargo and a fresh agreement dated 9 th November 2023 which concerned 84 metric tons was executed. The agreement recognised the earlier payment of USD 280,000.00 and required a further USD 1,000,000 to be paid upon presentation of an original bill of lading. The interested party states further that it remitted the additional USD 1,000,000 on 26 th December 2023 to the escrow account.
It is stated further that the shipment was represented by three containers identified as SEGU2490020, SEGU3374174 and TEMU0281304. Upon arrival at Nansha in China, the seals and weights on the containers did not correspond with the expected cargo. Two containers contained bags and another contained metal drums with the contents therein being ordinary soil or mud instead of the contracted mineral ore. A report confirming the condition of the cargo was obtained on 25 th January 2024 and the interested party immediately instructed that, release of the money in the escrow account be stopped, reported the matter to law-enforcement authorities and commenced commercial proceedings for recovery of its money. It also participated in the criminal investigations.
The interested party states further that it paid a total of USD 1,280,000 of which USD 280,000 had already been released before the final remittance and that, after receipt of the final USD 1,000,000, the respondent transferred or withdrew USD 50,500 into a Kenya shillings account. The remaining balance was thereafter placed by Sidian Bank Limited in the two cash margin accounts following the complaint and court intervention.
It is added that a director associated with Sanjola was charged in Milimani Chief Magistrate's Court criminal case No. E358 of 2024 with conspiracy to commit a felony contrary to Section 393 of the Penal Code and obtaining money by false pretences contrary to Section 313 of the Penal Code. The interested party denies any involvement in the suspected offences and argues that the preserved money can be traced to its remittances and that it took reasonable and immediate steps to prevent release of the money once the false cargo was discovered. It therefore claims a beneficial and proprietary interest in the funds and invokes Section 93 of POCAMLA for protection of its interest.
It is deponed further that the interested party instituted suit against Sanjola, the respondent herein and Sidian Bank vide Mombasa High Court suit number E018 of 2024 where on 30 th January 2024, Honourable Lady Justice Florence Macharia issued an injunction restraining the bank from releasing the funds to Sanjola.
Analysis and determination
The application was disposed of by way of written submissions. The applicant filed submissions dated 15 th April 2026 while the respondent and the interested party filed their submissions dated 25 th May 2026 and 3 rd March 2026 respectively. I have read and considered the originating motion, the supporting and further affidavits, the respondent's replying affidavit, the interested party's affidavit, the exhibits produced and the parties' written submissions and the law. Having done so, I have formed the opinion that the issues which arise for determination in this matter are;
a. Whether the preserved funds are proceeds of crime.
b. Whether the interested party has established an interest deserving protection under section 93 of POCAMLA.
c. What orders are appropriate in the circumstances.
Section 2 of POCAMLA defines proceeds of crime broadly to include property or an economic advantage derived or realised, directly or indirectly, as a result of or in connection with an offence. Section 92(1) of the same Act sets the threshold for a forfeiture order in the following terms;
The High Court shall, subject to section 94, make an order applied for under section 90(1) if it finds on a balance of probabilities that the property concerned-
(a) has been used or is intended for use in the commission of an offence; or (b) is proceeds of crime.”
In my view, the applicant’s case is leveraged on Section 90(1)(b). The legal burden of proof remains with the applicant. This burden entails the applicant to place before the court cogent and reasonable evidence that the property being pursued, in this case the money in question, is proceeds of crime. It will not be enough to place existence of bank account balances involving a commercial transaction dispute and call upon the holder of the funds to prove its innocence. In Ethics and Anti-Corruption Commission & another v Aboo [2026] KESC 44 (KLR) the Supreme Court of Kenya settled the point as follows;
‘The title of the statute, Proceeds of Crime and Money Laundering Act , confirms this statement. The property in question, in terms of section 2 aforesaid must be connected to some criminal offence or constitute proceeds of crime. In this regard, the property in question must have been used or intended for use in the commission of a crime. By the same token, the property is to be regarded as a proceed of crime if it has been realized or derived directly or indirectly as a result of or in connection with an offence. 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.’
Once credible evidence establishes that nexus, the evidential burden shifts to the person asserting a lawful source or protected interest to prove the source and purpose for which the money found itself in the identified account or hands and rebut the applicant’s evidence that it is proceeds of crime. However, that shifting of evidential burden does not relieve the applicant of the initial duty to prove the facts on which forfeiture is sought.
In the present matter, the source and movement of the preserved money are not in dispute. The undisputed facts are that the genesis of the matter is a commercial transaction between Sanjola and the interested party and it is common ground that the funds originated from the interested party. The applicant has not made any claim that the interested party obtained the funds from an illegitimate source. The interested party has produced the agreements and evidence of remittance and gave a clear chronology of the payments which have not been rebutted or questioned by the applicant. The respondent admits receipt of the money in the escrow account. In this regard, the money is traceable from the interested party into the respondent's account and from there into the cash margin accounts held at Sidian Bank Limited.
This court did not benefit from the side of the story from Sanjola which had contracted with the interested party as it has not been made a party to these proceedings. That notwithstanding, it is clear to me that after the interested party discovered the scam allegedly perpetrated by Sanjola, it made a complaint which was followed by initiation of police investigations, preservation proceedings, criminal charges against a person associated with Sanjola and a commercial dispute in the High Court of Kenya at Mombasa.
It has been demonstrated that the remitted money was obtained upon presentation of documents and representations that a genuine mineral shipment existed. As much as I agree that the evidence establishes on a balance of probabilities that an offence was committed, I must note that the funds belonged to a victim who is easily available and most likely innocent of any involvement in any offence connected to the transaction. I do not think that definition of proceeds of crime covers every property which comes into conduct with elements of criminal activities. For property to be placed within the meaning of proceeds of crime, it must carry benefit or value to the perpetrators or their agents whether identified or not without traceability of an innocent owner.
The perpetrator of the alleged offence in question one Lumumba Ulundu Patrick alias Gabriel Kulonda Ilungu alias Lumumba Patrick Byarufu who is said to be a representative of the offending company has been charged with offences of conspiracy to commit a felony and obtaining money by false pretences. The interested party is the complainant in the said criminal case. The applicant has not placed before the court evidence that the respondent was part and parcel of the commission of the offence. The respondent has acknowledged which has been supported by the interested party that its role was to receive and hold the purchase money as escrow agent. Receipt of money in that capacity does not, without more, make the advocate a beneficial owner or participant in the fraud.
The perpetrators of the offences despite being known and reachable have not been made parties to these proceedings. Although forfeiture proceedings go for the property, rather than the perpetrator of the offences in question, I hold the view that where the perpetrator is easily identifiable and their presence or participation in the proceedings is key to maintaining clear chain of events, the court should raise questions when they are left out especially where the person set to lose if the property were to be forfeited is seemingly an innocent victim.
In its submissions, the respondent made reference to existence of commercial court proceedings vide HCCOMM/E023/2024 Sanjola Company Limited vs Mose and Company Limited, Yingcheng (Shenzhen) International Trade Co. Limited and Sidian Bank Limited, arising from the failed transaction whose details have not been disclosed in the replying affidavit. The interested party identifies other proceedings in Mombasa High Court Commercial miscellaneous application No. E018 of 2024. This court has not been supplied with any final order or judgment or decree in the two matters neither have their statuses been disclosed.
The respondent argues that the contractual rights to the money should be resolved in the commercial forum and that this suit should be dismissed with costs. There is a disputed allegation that USD 50,500 was transferred or withdrawn from the final remittance and converted into Kenya shillings. The respondent says that its only possible interest was in fees and expenses. The agreements, instructions, fee note and complete bank statements necessary to determine the contractual entitlement to that amount are not sufficiently presented in this record. That question cannot be decided merely from accusation and denial. It forms part of the accounting and contractual dispute for the commercial court. The respondent was only a holder of the funds and not accomplice in the offence. There is advocate client relationship between it and whoever is entitled to the money which it is has a legal duty to respect.
I must in the above circumstances exercise restraint in making any determinate orders on issues which are clearly before other courts of competent and concurrent jurisdiction which in my view seem to be the correct forums for the disputes in this matter. That is the purpose served by the principle of sub-judice as it avoids possibility of conflicting orders emanating from different courts which would lead to jeopardizing administration of justice. This was recognized in the case of Kenya National Commission on Human Rights v Attorney General; Independent Electoral & Boundaries Commission & 16 others (Interested Parties) [2020] KESC 54 (KLR) where the court held that;
‘The term ‘sub-judice’ is defined in Black’s Law Dictionary 9 th Edition as: “Before the Court or Judge for determination.” T he purpose of the sub-judice rule is to stop the filing of a multiplicity of suits between the same parties or those claiming under them over the same subject matter so as to avoid abuse of the Court process and diminish the chances of courts, with competent jurisdiction, issuing conflicting decisions over the same subject matter. This means that when two or more cases are filed between the same parties on the same subject matter before courts with jurisdiction, the matter that is filed later ought to be stayed in order to await the determination to be made in the earlier suit.’
Having said the above, I find that the applicant has not proved that the respondent was an accomplice in the underlying fraud or that it beneficially owned the preserved principal balance. Not every matter which involves criminal undertones falls under the mandate of the applicant. Disputes and disagreements will always arise in contractual relationships but not all must attract the definition of proceeds of crime. The origin of the funds in this matter is not in dispute neither is the origin claimed to be from criminal activities. If indeed there will be proof of fraud, the victim will be the interested party who would then be entitled to restitution and not the public. The mandate of the applicant remains in the realm of protection of the public from the effects of criminal enterprise and not private contractual relationships. The applicant should not be allowed to turn itself to a debt collector in failed contractual transactions.
In view of what I have stated above, I come to a conclusion that the applicant has failed to place the funds in question in the description of proceeds of crime. Issuing forfeiture orders in the circumstances of this case would, in my considered opinion amount to depriving the interested party or whoever may be found to have a right to retain the funds of their property without due process of the law which is unconstitutional. The foregoing discussion settles the first issue.
Section 93(1) of POCAMLA under which the interested party’s application has been brought provides that;
Where an application is made for a forfeiture order against property, a person who claims an interest in the property may apply to the High Court, before the forfeiture order is made and the court, if satisfied on a balance of probabilities-
a. that the person was not in any way involved in the commission of the offence; and
b. where the person acquired the interest during or after the commission of the offence, that he acquired the interest-
(i) for sufficient consideration; and
(ii) without knowing, and in circumstances such as not to arouse a reasonable suspicion, that the property was, at the time he acquired it, tainted property,
the court shall make an order declaring the nature, extent and value (at the time the order was made) of the person’s interest.
It is clear that above provision recognises that property which is liable to forfeiture may contain an interest belonging to a person who was not involved in the commission of the predicate offence. In those circumstances, the court may declare the nature, extent and value of a third party’s interest. The interested party in this matter did not acquire the money from the alleged fraudsters. It was the source of the money. Its interest arises from its remittances and its claim for restitution after the promised cargo proved false.
In its written submissions, the interested party argues that civil forfeiture is not intended to confiscate money from an innocent victim and transfer it to the State. It relies principally on Assets Recovery Agency v Mubadala Merchants Limited & 3 others; Bernhard Ten Brinke Holding BV & another (Interested Parties) [2022] KEHC 14486 (KLR) where innocent remitters of money in an escrow fraud were treated as victims rather than accomplices. In recognising the purport of Section 93 of POCAMLA, the court held in the cited authority that;
‘This law is intended to protect third parties from loss provided that they were not in any way involved in the commission of the crime.’
Similarly in Assets Recovery Agency v Phylis Njeri Ngirita & 2 oters; Platnum Credit Limited(Interested Party) & another [2020] KEHC 3214 (KLR) the court made a finding that properties which had been proved to be proceeds of crime merited protection under Section 93 of POCAMLA owing to the innocence of the creditors. The Honourable Lady Justice Mumbi Ngugi (as she then was) held that;
‘Section 93 of POCAMLA is intended to protect third parties in the circumstances set out under its provisions. The Agency did not place any material before the court on the basis of which the court could conclude that the Interested Parties were involved in the offences out of which the property the subject of forfeiture was acquired, or that they knew that the motor vehicles were tainted properties at the time they acquired such interests. There is a danger that a party who acquires property in circumstances similar to what is presently before me may obtain financing on the security of such properties with a view to concealing the source of the properties or defeating forfeiture proceedings, and those who acquire such interests may be complicit. However, no such evidence in this case has been placed before me by the Agency. That being the case, the interests of the Interested Parties merit the protection of the court under section 93 of POCAMLA.’
In my analysis of the facts, the interested party’s acts are consistent with an innocent victim. It raised concerns during the transaction, obtained independent assistance to verify the cargo, stopped release of the money after the discovery, reported the matter to the police and commenced commercial proceedings. Those acts are inconsistent with an intention to conceal, disguise or benefit from criminal proceeds.
However, whereas this court cannot take a victim's legitimate assets merely because it passed through a transaction in which another person committed an offence, it must exercise caution so that it does not determine a commercial dispute or criminal culpability in the guise of civil forfeiture or declarations of interests of third parties under Section 93 of POCAMLA. I say this cognizance of the fact that the aim of enacting POCAMLA was to deprive criminal offenders of criminal benefit but not to convert the Government into the beneficiary of a victim's loss.
Having said the above, I hold the opinion that civil forfeiture proceedings are not meant to settle commercial disputes or determine civil or contractual rights of individuals. The proprietary rights of an interested party in proceedings of this nature will only be pronounced where the property is shown to have rightly belonged to them without any possibility of intervening or competing rights of other parties.
In the matter before me, the respondent is said to be holding the funds pending conclusion of the transactions between the contracting parties. Not all parties to that contract have been heard or joined in these proceedings. It is clear to me that there are litigations elsewhere involving the parties to the contract. I hold the view that the courts handling those litigations would be the appropriate forums for determining ownership of the funds held by the respondent.
It is notable that this court has not been supplied with sufficient evidence to show whether the contractual obligations were determined or not. What I have been supplied with remains allegations which have not been tested in evidence. Ordering the release of the money to the interested party would amount to determining the issues between it and the other persons who it contracted for delivery of the ore which would in my view be premature. Such an order may at the end embarrass the courts which are hearing the commercial disputes. The proper course is to protect the funds from forfeiture and allow the commercial court to determine the parties’ contractual entitlements.
In doing so, I am persuaded by the position taken by Honourable Lady Justice E.N. Maina in Assets Recovery Agency v Mubadala Merchants Limited & 3 others; Bernhard Ten Brinke Holding BV & another (Interested Parties) [2022] KEHC 14486 (KLR) where she stated as follows;
‘I note however that there is a commercial dispute, touching on the funds, between the interested parties and the respondents in the Commercial Division of the High Court being Commercial Suit No E632 of 2021 and therefore this court would in deference to those proceedings (Commercial Suit No E632 of 2021), decline to make any orders under section 93(1) of the Proceeds of Crime and Anti-Money Laundering Act .’
In conclusion and in settlement of the last issue, I make the following orders;
1. The applicant’s originating motion dated 30 th January 2025 is hereby dismissed with costs to the respondent.
2. The interested party’s application dated 16 th September 2025 is disallowed with no orders as to costs.
3. Pursuant to Section 89(1)(b) of the Proceeds of Crime and Anti-Money Laundering Act, the preservation and restriction orders granted in this court’s miscellaneous civil application number E053 of 2024 on 31-10-2024 are hereby rescinded.
Dated signed and delivered at Nairobi this 18 th day of September 2026.
B.M. MUSYOKI
JUDGE OF THE HIGH COURT .
Judgment delivered in presence of Mr Adow for the applicant and Mr. Muturi Njoroge for the interested party and in absence of the respondent.
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a. United States Dollars 949,463.41 held in account number 0102257000041 in the name of Mose and Company at Sidian Bank Limited.
b. Kshs 2,469,558.00 held in account number 01022570000031 held in the name of Mose and Company held at Sidian Bank Limited.
The application is opposed through a replying affidavit sworn on 2 nd May 2025 by the respondent’s managing partner, one Stephen Mose. The interested party filed a notice of motion dated 16 th September 2025 seeking leave to participate in these proceedings and exclusion of the preserved funds from forfeiture and instead the funds be released to it through its advocates. On 3 rd February 2026, the interested party was joined to the suit and the court directed that its application and supporting affidavit would constitute its response to the originating motion.
The applicant's case
The originating motion is accompanied by supporting and further affidavits sworn on 30 th January 2025 and on 15 th April 2026 respectively by an investigator attached to the applicant by the name Benard Gitonga. He states that on 19 th September 2024, the applicant received information concerning a suspected fraud involving sale of raw tantalite niobium ore (hereinafter referred to as ‘the ore’) following which an inquiry file was opened and warrants to investigate and restrict the relevant accounts were obtained on 20 th September 2024 in Milimani Chief Magistrate's Court miscellaneous civil application No. E1114 of 2024.
The applicant adds that the interested party, a company based in the People's Republic of China, entered into commercial arrangements with Sanjola Limited (hereinafter referred to as ‘Sanjola’) for purchase and export of the ore. The respondent was appointed to receive and hold the purchase money as an escrow agent. USD 1,000,000 was remitted to the respondent's account on or about 29 th December 2023 but the contracted ore was never delivered.
According to the applicant, investigations established that a container identified as TCLU8755716 entered Kenya from Uganda through Malaba. The goods were later handled at a container terminal in Mombasa and were cross-stuffed into containers identified as numbers SEGU2490020 and TEMU0281304. The cargo which reached China was examined and found to consist of ordinary soil or mud rather than the contracted ore. The container seals and recorded weights were also said to differ from the particulars represented to the interested party.
The investigator states that the applicant recorded statements from the interested party's representative and a partner in the respondent firm and obtained bank records from Sidian Bank Limited which showed receipt of the remitted purchase money into the respondent's escrow or client account and part of it was later moved to the two cash margin accounts which are now preserved.
The applicant’s further affidavit states that the underlying inquiry concerns the offence of obtaining money by false pretences contrary to Section 313 of the Penal Code and related money-laundering offences. The further affidavit traces the movement of the containers from Uganda through Kenya to China and repeats that the cargo delivered was valueless soil. It also states that the transaction was structured to give the appearance of a genuine international mineral trade while concealing a fraudulent scheme.
The applicant maintains that the preserved money is property obtained as a direct result of fraud. It argues that the fact that the money originated from the interested party does not prevent it from becoming proceeds of crime once it was obtained by false representations and placed under the control of persons involved in the transaction. It therefore asks the court to declare the funds as proceeds of crime and forfeit them to the Government.
The respondent's case
In its replying affidavit, the respondent admits that it was instructed to act as an escrow stakeholder in the transaction between Sanjola and the interested party. It received the purchase money into its account but states that it did so in its professional capacity and strictly subject to the escrow instructions given by the contracting parties.
The respondent denies that it was a party to the underlying contract for supply of the ore. It also denies participation in any false representation concerning the source, quality, shipment, weight or delivery of the mineral cargo. It states that it neither sold the goods nor inspected the containers and could not guarantee performance by Sanjola. It further states that it does not have a beneficial interest in the preserved principal sum. The respondent adds that its only possible interest is in professional fees and expenses lawfully incurred in the course of the retainer. It denies collusion, fraud, concealment, layering or any other act of money laundering and states that it has cooperated with the investigators.
The interested party's case
The interested party’s application prays as follows;
1. THAT Yingcheng (Shenzhen) International Trade Co. Limited be and is hereby joined to these proceedings as an Interested Party.
2. THAT a total sum of USD 949,453 held at Sidian Bank, Cash Margin Account Number: 01022570000041 (USD) and Kshs 2,469, 558 held at Sidian Bank, Bank, Cash Margin Account Number: 01022570000031 (Kshs) both in the name of Mose and Company be and is hereby excluded from forfeiture.
3. THAT a total sum of USD 949,453 held at Sidian Bank, Cash Margin Account Number: 01022570000041 (USD) and Kshs 2,469, 558 held at Sidian Bank, Cash Margin Account Number: 01022570000031 (Kshs) both in the name of Mose and Company be released to Gracen Law Advocates, the advocates for Yingcheng (Shenzhen) International Trade Co. Limited forthwith.
4. Costs of the application.
5. Any further or other orders the Court may deem just and fit to grant in the circumstances.
Wu Jilin, also known as Mitchelle Wu, gives on behalf of the interested party a detailed chronology of the transaction and maintains that the interested party is a victim of an international commercial fraud rather than an accomplice or beneficiary of crime. He states that the interested party was introduced to persons who represented that they could supply the ore to China from the Democratic Republic of Congo through Uganda and Kenya. There had been an earlier unsuccessful transaction through persons associated with an entity he refers to as Euro Space in which part of the purchase money was refunded but some remained withheld.
The interested party adds that, it first paid USD 10,000 to the escrow account operated by the respondent and on 2 nd October 2023 entered into an agreement for an initial shipment. A further USD 280,000.00 was remitted on or about 8 th October 2023. The deponent avers further that because of concerns about the transaction, the interested party obtained assistance to verify the cargo and a fresh agreement dated 9 th November 2023 which concerned 84 metric tons was executed. The agreement recognised the earlier payment of USD 280,000.00 and required a further USD 1,000,000 to be paid upon presentation of an original bill of lading. The interested party states further that it remitted the additional USD 1,000,000 on 26 th December 2023 to the escrow account.
It is stated further that the shipment was represented by three containers identified as SEGU2490020, SEGU3374174 and TEMU0281304. Upon arrival at Nansha in China, the seals and weights on the containers did not correspond with the expected cargo. Two containers contained bags and another contained metal drums with the contents therein being ordinary soil or mud instead of the contracted mineral ore. A report confirming the condition of the cargo was obtained on 25 th January 2024 and the interested party immediately instructed that, release of the money in the escrow account be stopped, reported the matter to law-enforcement authorities and commenced commercial proceedings for recovery of its money. It also participated in the criminal investigations.
The interested party states further that it paid a total of USD 1,280,000 of which USD 280,000 had already been released before the final remittance and that, after receipt of the final USD 1,000,000, the respondent transferred or withdrew USD 50,500 into a Kenya shillings account. The remaining balance was thereafter placed by Sidian Bank Limited in the two cash margin accounts following the complaint and court intervention.
It is added that a director associated with Sanjola was charged in Milimani Chief Magistrate's Court criminal case No. E358 of 2024 with conspiracy to commit a felony contrary to Section 393 of the Penal Code and obtaining money by false pretences contrary to Section 313 of the Penal Code. The interested party denies any involvement in the suspected offences and argues that the preserved money can be traced to its remittances and that it took reasonable and immediate steps to prevent release of the money once the false cargo was discovered. It therefore claims a beneficial and proprietary interest in the funds and invokes Section 93 of POCAMLA for protection of its interest.
It is deponed further that the interested party instituted suit against Sanjola, the respondent herein and Sidian Bank vide Mombasa High Court suit number E018 of 2024 where on 30 th January 2024, Honourable Lady Justice Florence Macharia issued an injunction restraining the bank from releasing the funds to Sanjola.
Analysis and determination
The application was disposed of by way of written submissions. The applicant filed submissions dated 15 th April 2026 while the respondent and the interested party filed their submissions dated 25 th May 2026 and 3 rd March 2026 respectively. I have read and considered the originating motion, the supporting and further affidavits, the respondent's replying affidavit, the interested party's affidavit, the exhibits produced and the parties' written submissions and the law. Having done so, I have formed the opinion that the issues which arise for determination in this matter are;
a. Whether the preserved funds are proceeds of crime.
b. Whether the interested party has established an interest deserving protection under section 93 of POCAMLA.
c. What orders are appropriate in the circumstances.
Section 2 of POCAMLA defines proceeds of crime broadly to include property or an economic advantage derived or realised, directly or indirectly, as a result of or in connection with an offence. Section 92(1) of the same Act sets the threshold for a forfeiture order in the following terms;
The High Court shall, subject to section 94, make an order applied for under section 90(1) if it finds on a balance of probabilities that the property concerned-
(a) has been used or is intended for use in the commission of an offence; or (b) is proceeds of crime.”
In my view, the applicant’s case is leveraged on Section 90(1)(b). The legal burden of proof remains with the applicant. This burden entails the applicant to place before the court cogent and reasonable evidence that the property being pursued, in this case the money in question, is proceeds of crime. It will not be enough to place existence of bank account balances involving a commercial transaction dispute and call upon the holder of the funds to prove its innocence. In Ethics and Anti-Corruption Commission & another v Aboo [2026] KESC 44 (KLR) the Supreme Court of Kenya settled the point as follows;
‘The title of the statute, Proceeds of Crime and Money Laundering Act , confirms this statement. The property in question, in terms of section 2 aforesaid must be connected to some criminal offence or constitute proceeds of crime. In this regard, the property in question must have been used or intended for use in the commission of a crime. By the same token, the property is to be regarded as a proceed of crime if it has been realized or derived directly or indirectly as a result of or in connection with an offence. 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.’
Once credible evidence establishes that nexus, the evidential burden shifts to the person asserting a lawful source or protected interest to prove the source and purpose for which the money found itself in the identified account or hands and rebut the applicant’s evidence that it is proceeds of crime. However, that shifting of evidential burden does not relieve the applicant of the initial duty to prove the facts on which forfeiture is sought.
In the present matter, the source and movement of the preserved money are not in dispute. The undisputed facts are that the genesis of the matter is a commercial transaction between Sanjola and the interested party and it is common ground that the funds originated from the interested party. The applicant has not made any claim that the interested party obtained the funds from an illegitimate source. The interested party has produced the agreements and evidence of remittance and gave a clear chronology of the payments which have not been rebutted or questioned by the applicant. The respondent admits receipt of the money in the escrow account. In this regard, the money is traceable from the interested party into the respondent's account and from there into the cash margin accounts held at Sidian Bank Limited.
This court did not benefit from the side of the story from Sanjola which had contracted with the interested party as it has not been made a party to these proceedings. That notwithstanding, it is clear to me that after the interested party discovered the scam allegedly perpetrated by Sanjola, it made a complaint which was followed by initiation of police investigations, preservation proceedings, criminal charges against a person associated with Sanjola and a commercial dispute in the High Court of Kenya at Mombasa.
It has been demonstrated that the remitted money was obtained upon presentation of documents and representations that a genuine mineral shipment existed. As much as I agree that the evidence establishes on a balance of probabilities that an offence was committed, I must note that the funds belonged to a victim who is easily available and most likely innocent of any involvement in any offence connected to the transaction. I do not think that definition of proceeds of crime covers every property which comes into conduct with elements of criminal activities. For property to be placed within the meaning of proceeds of crime, it must carry benefit or value to the perpetrators or their agents whether identified or not without traceability of an innocent owner.
The perpetrator of the alleged offence in question one Lumumba Ulundu Patrick alias Gabriel Kulonda Ilungu alias Lumumba Patrick Byarufu who is said to be a representative of the offending company has been charged with offences of conspiracy to commit a felony and obtaining money by false pretences. The interested party is the complainant in the said criminal case. The applicant has not placed before the court evidence that the respondent was part and parcel of the commission of the offence. The respondent has acknowledged which has been supported by the interested party that its role was to receive and hold the purchase money as escrow agent. Receipt of money in that capacity does not, without more, make the advocate a beneficial owner or participant in the fraud.
The perpetrators of the offences despite being known and reachable have not been made parties to these proceedings. Although forfeiture proceedings go for the property, rather than the perpetrator of the offences in question, I hold the view that where the perpetrator is easily identifiable and their presence or participation in the proceedings is key to maintaining clear chain of events, the court should raise questions when they are left out especially where the person set to lose if the property were to be forfeited is seemingly an innocent victim.
In its submissions, the respondent made reference to existence of commercial court proceedings vide HCCOMM/E023/2024 Sanjola Company Limited vs Mose and Company Limited, Yingcheng (Shenzhen) International Trade Co. Limited and Sidian Bank Limited, arising from the failed transaction whose details have not been disclosed in the replying affidavit. The interested party identifies other proceedings in Mombasa High Court Commercial miscellaneous application No. E018 of 2024. This court has not been supplied with any final order or judgment or decree in the two matters neither have their statuses been disclosed.
The respondent argues that the contractual rights to the money should be resolved in the commercial forum and that this suit should be dismissed with costs. There is a disputed allegation that USD 50,500 was transferred or withdrawn from the final remittance and converted into Kenya shillings. The respondent says that its only possible interest was in fees and expenses. The agreements, instructions, fee note and complete bank statements necessary to determine the contractual entitlement to that amount are not sufficiently presented in this record. That question cannot be decided merely from accusation and denial. It forms part of the accounting and contractual dispute for the commercial court. The respondent was only a holder of the funds and not accomplice in the offence. There is advocate client relationship between it and whoever is entitled to the money which it is has a legal duty to respect.
I must in the above circumstances exercise restraint in making any determinate orders on issues which are clearly before other courts of competent and concurrent jurisdiction which in my view seem to be the correct forums for the disputes in this matter. That is the purpose served by the principle of sub-judice as it avoids possibility of conflicting orders emanating from different courts which would lead to jeopardizing administration of justice. This was recognized in the case of Kenya National Commission on Human Rights v Attorney General; Independent Electoral & Boundaries Commission & 16 others (Interested Parties) [2020] KESC 54 (KLR) where the court held that;
‘The term ‘sub-judice’ is defined in Black’s Law Dictionary 9 th Edition as: “Before the Court or Judge for determination.” T he purpose of the sub-judice rule is to stop the filing of a multiplicity of suits between the same parties or those claiming under them over the same subject matter so as to avoid abuse of the Court process and diminish the chances of courts, with competent jurisdiction, issuing conflicting decisions over the same subject matter. This means that when two or more cases are filed between the same parties on the same subject matter before courts with jurisdiction, the matter that is filed later ought to be stayed in order to await the determination to be made in the earlier suit.’
Having said the above, I find that the applicant has not proved that the respondent was an accomplice in the underlying fraud or that it beneficially owned the preserved principal balance. Not every matter which involves criminal undertones falls under the mandate of the applicant. Disputes and disagreements will always arise in contractual relationships but not all must attract the definition of proceeds of crime. The origin of the funds in this matter is not in dispute neither is the origin claimed to be from criminal activities. If indeed there will be proof of fraud, the victim will be the interested party who would then be entitled to restitution and not the public. The mandate of the applicant remains in the realm of protection of the public from the effects of criminal enterprise and not private contractual relationships. The applicant should not be allowed to turn itself to a debt collector in failed contractual transactions.
In view of what I have stated above, I come to a conclusion that the applicant has failed to place the funds in question in the description of proceeds of crime. Issuing forfeiture orders in the circumstances of this case would, in my considered opinion amount to depriving the interested party or whoever may be found to have a right to retain the funds of their property without due process of the law which is unconstitutional. The foregoing discussion settles the first issue.
Section 93(1) of POCAMLA under which the interested party’s application has been brought provides that;
Where an application is made for a forfeiture order against property, a person who claims an interest in the property may apply to the High Court, before the forfeiture order is made and the court, if satisfied on a balance of probabilities-
a. that the person was not in any way involved in the commission of the offence; and
b. where the person acquired the interest during or after the commission of the offence, that he acquired the interest-
(i) for sufficient consideration; and
(ii) without knowing, and in circumstances such as not to arouse a reasonable suspicion, that the property was, at the time he acquired it, tainted property,
the court shall make an order declaring the nature, extent and value (at the time the order was made) of the person’s interest.
It is clear that above provision recognises that property which is liable to forfeiture may contain an interest belonging to a person who was not involved in the commission of the predicate offence. In those circumstances, the court may declare the nature, extent and value of a third party’s interest. The interested party in this matter did not acquire the money from the alleged fraudsters. It was the source of the money. Its interest arises from its remittances and its claim for restitution after the promised cargo proved false.
In its written submissions, the interested party argues that civil forfeiture is not intended to confiscate money from an innocent victim and transfer it to the State. It relies principally on Assets Recovery Agency v Mubadala Merchants Limited & 3 others; Bernhard Ten Brinke Holding BV & another (Interested Parties) [2022] KEHC 14486 (KLR) where innocent remitters of money in an escrow fraud were treated as victims rather than accomplices. In recognising the purport of Section 93 of POCAMLA, the court held in the cited authority that;
‘This law is intended to protect third parties from loss provided that they were not in any way involved in the commission of the crime.’
Similarly in Assets Recovery Agency v Phylis Njeri Ngirita & 2 oters; Platnum Credit Limited(Interested Party) & another [2020] KEHC 3214 (KLR) the court made a finding that properties which had been proved to be proceeds of crime merited protection under Section 93 of POCAMLA owing to the innocence of the creditors. The Honourable Lady Justice Mumbi Ngugi (as she then was) held that;
‘Section 93 of POCAMLA is intended to protect third parties in the circumstances set out under its provisions. The Agency did not place any material before the court on the basis of which the court could conclude that the Interested Parties were involved in the offences out of which the property the subject of forfeiture was acquired, or that they knew that the motor vehicles were tainted properties at the time they acquired such interests. There is a danger that a party who acquires property in circumstances similar to what is presently before me may obtain financing on the security of such properties with a view to concealing the source of the properties or defeating forfeiture proceedings, and those who acquire such interests may be complicit. However, no such evidence in this case has been placed before me by the Agency. That being the case, the interests of the Interested Parties merit the protection of the court under section 93 of POCAMLA.’
In my analysis of the facts, the interested party’s acts are consistent with an innocent victim. It raised concerns during the transaction, obtained independent assistance to verify the cargo, stopped release of the money after the discovery, reported the matter to the police and commenced commercial proceedings. Those acts are inconsistent with an intention to conceal, disguise or benefit from criminal proceeds.
However, whereas this court cannot take a victim's legitimate assets merely because it passed through a transaction in which another person committed an offence, it must exercise caution so that it does not determine a commercial dispute or criminal culpability in the guise of civil forfeiture or declarations of interests of third parties under Section 93 of POCAMLA. I say this cognizance of the fact that the aim of enacting POCAMLA was to deprive criminal offenders of criminal benefit but not to convert the Government into the beneficiary of a victim's loss.
Having said the above, I hold the opinion that civil forfeiture proceedings are not meant to settle commercial disputes or determine civil or contractual rights of individuals. The proprietary rights of an interested party in proceedings of this nature will only be pronounced where the property is shown to have rightly belonged to them without any possibility of intervening or competing rights of other parties.
In the matter before me, the respondent is said to be holding the funds pending conclusion of the transactions between the contracting parties. Not all parties to that contract have been heard or joined in these proceedings. It is clear to me that there are litigations elsewhere involving the parties to the contract. I hold the view that the courts handling those litigations would be the appropriate forums for determining ownership of the funds held by the respondent.
It is notable that this court has not been supplied with sufficient evidence to show whether the contractual obligations were determined or not. What I have been supplied with remains allegations which have not been tested in evidence. Ordering the release of the money to the interested party would amount to determining the issues between it and the other persons who it contracted for delivery of the ore which would in my view be premature. Such an order may at the end embarrass the courts which are hearing the commercial disputes. The proper course is to protect the funds from forfeiture and allow the commercial court to determine the parties’ contractual entitlements.
In doing so, I am persuaded by the position taken by Honourable Lady Justice E.N. Maina in Assets Recovery Agency v Mubadala Merchants Limited & 3 others; Bernhard Ten Brinke Holding BV & another (Interested Parties) [2022] KEHC 14486 (KLR) where she stated as follows;
‘I note however that there is a commercial dispute, touching on the funds, between the interested parties and the respondents in the Commercial Division of the High Court being Commercial Suit No E632 of 2021 and therefore this court would in deference to those proceedings (Commercial Suit No E632 of 2021), decline to make any orders under section 93(1) of the Proceeds of Crime and Anti-Money Laundering Act .’
In conclusion and in settlement of the last issue, I make the following orders;
1. The applicant’s originating motion dated 30 th January 2025 is hereby dismissed with costs to the respondent.
2. The interested party’s application dated 16 th September 2025 is disallowed with no orders as to costs.
3. Pursuant to Section 89(1)(b) of the Proceeds of Crime and Anti-Money Laundering Act, the preservation and restriction orders granted in this court’s miscellaneous civil application number E053 of 2024 on 31-10-2024 are hereby rescinded.
Dated signed and delivered at Nairobi this 18 th day of September 2026.
B.M. MUSYOKI
JUDGE OF THE HIGH COURT .
Judgment delivered in presence of Mr Adow for the applicant and Mr. Muturi Njoroge for the interested party and in absence of the respondent.
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