Assets Recovery Agency v Hardi Enterprises Limited & 3 others [2020] eKLR Case Summary

Court
High Court of Kenya at Nairobi, Anti-Corruption & Economic Crimes Division
Category
Civil
Judge(s)
Mumbi Ngugi
Judgment Date
July 10, 2020
Country
Kenya
Document Type
PDF
Number of Pages
3
Discover the key insights from the Assets Recovery Agency v Hardi Enterprises Limited & 3 others [2020] eKLR case. Explore the judgment's implications on asset recovery and legal procedures in Kenya.

Case Brief: Assets Recovery Agency v Hardi Enterprises Limited & 3 others [2020] eKLR

1. Case Information:
- Name of the Case: Assets Recovery Agency v. Hardi Enterprises Limited & Others
- Case Number: Miscellaneous Civil Application No. 8 of 2020
- Court: High Court of Kenya at Nairobi, Anti-Corruption and Economic Crimes Division
- Date Delivered: July 10, 2020
- Category of Law: Civil
- Judge(s): Mumbi Ngugi
- Country: Kenya

2. Questions Presented:
The court must resolve the following legal issues:
1. Whether the preservation and seizure orders issued by the court on February 24, 2020, should be rescinded based on the applicants' claims of undue hardship.
2. Whether the funds and assets subject to the preservation orders can be deemed proceeds of crime.

3. Facts of the Case:
The case involves the Assets Recovery Agency (the respondent) and several applicants including Hardi Enterprises Limited, Toddy Civil Engineering Company Limited, Anthony Ng’ang’a Mwaura, and Rose Njeri Ng’ang’a. The respondent obtained preservation orders for assets allegedly linked to money laundering related to funds misappropriated from the Nairobi City County Government. The applicants argue that the preservation orders should be rescinded as they hinder their ability to conduct business and provide for living expenses. They contend that the assets in question were legally acquired and are essential for their operations.

4. Procedural History:
The applicants filed two applications on March 2, 2020, and March 23, 2020, seeking to vary or rescind the preservation orders. The court addressed the merits of the application dated March 2, 2020, and struck out the March 23 application due to it being sub-judice. The applicants argued that the respondent had misled the court regarding the legitimacy of the tender awarded to them, while the respondent maintained that the funds involved were proceeds of crime.

5. Analysis:
- Rules: The relevant legal framework includes the Proceeds of Crime and Anti-Money Laundering Act (POCAMLA), specifically Section 89, which allows for the variation or rescission of preservation orders if it can be shown that such orders cause undue hardship.
- Case Law: The court referenced previous cases, including *Asset Recovery Agency v. Samuel Wachenje* to establish that the burden of proof lies on the applicants to demonstrate undue hardship and that the preservation orders must be justified by reasonable grounds.
- Application: The court found that the applicants failed to demonstrate that the preservation orders deprived them of the means to provide for reasonable living expenses or that the hardship caused outweighed the risk of the property being destroyed or concealed. The court noted that the assets in question were not tools of trade but luxury vehicles.

6. Conclusion:
The court dismissed the application to rescind the preservation orders, concluding that the applicants did not meet the burden of proof required under Section 89 of POCAMLA. The ruling underscores the importance of establishing a factual basis for claims of undue hardship in the context of preservation orders related to alleged proceeds of crime.

7. Dissent:
There were no dissenting opinions noted in the ruling.

8. Summary:
The High Court of Kenya ruled against the applicants seeking to rescind preservation orders on assets linked to alleged money laundering. The court emphasized that the applicants failed to demonstrate undue hardship or that the assets were essential for their business operations. This case highlights the judicial scrutiny applied to preservation orders under anti-money laundering legislation and the necessity for clear evidence when challenging such orders.

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