Ethics and Anti-Corruption Commission v. Catherine Nkirote Maingi & Others (2020) eKLR

Court
Court of Appeal at Nairobi
Category
Civil
Judge(s)
M.K. Koome, S. Gatembu Kairu, J. Mohammed
Judgment Date
September 04, 2020
Country
Kenya
Document Type
PDF
Number of Pages
4



IN THE COURT OF APPEAL
AT NAIROBI
(CORAM: KOOME, GATEMBU & J. MOHAMMED, JJ.A)
CIVIL APPLICATION NO. 173 OF 2020
BETWEEN
ETHICS AND ANTI-CORRUPTION COMMISSION.................................APPLICANT
AND
CATHERINE NKIROTE MAINGI (sued in her personal capacity and also t/a VENYTE SUPPLIERS
and JOSCATE SALES SUPPLIES)......................................................1ST RESPONDENT
JOHN KAGO MURIMA......................................................................2ND RESPONDENT
JANE MAKENA MAINGI t/a QSETTERS INVESTMENTS..........3RD RESPONDENT
(Being an application for stay of execution of the Judgment and Decree of the
High Court of Kenya at Nairobi (Onyiego, J.) dated and delivered on 8th April 2020
in
ACEC Civil Suit No. 6 of 2018)
*******************
RULING OF THE COURT
1. Pending the hearing and determination of its intended appeal from the judgment of the High Court (J.N. Onyiego, J.) given on 8th April 2020, the applicant in its application dated 25th June 2020, made under Rule 5(2)(b) of the Court of Appeal Rules, seeks an order of injunction to restrain the respondents from withdrawing funds, transferring, disposing of, wasting or in any other way dealing with the underlisted bank accounts, namely:
Account Number Account Name
Amount (Kshs.)
i. A/c No. 0020192678243 John Murimi Kago 11,744,462.33
Equity Bank
ii. A/c No. 0940197601341 Venyte Suppliers 787,634.95

Equity Bank

iii. A/c No. 1180263423271 Qsetters Investments 82,100,05 Equity Bank
iv. A/c No. 0260192617892 Joscate Sales and Supplies 704,974.45 Equity Bank
v. A/c No. 01109416161300 Catherine Nkirote Maingi 15,888,804.50
Co-operative Bank
TOTAL
29,207,976.28
2. In the said judgment the subject of the intended appeal, the High Court dismissed the applicant’s suit against the respondents in which the applicant had sought: a declaration that the award of certain tenders by the National Youth Service (NYS) to the respondents were irregular and the subsequent contracts were also void; an order for restitution of Kshs.45,517,241.40 to
NYS being of the payments received by the 3rd respondent as a result of an irregular procurement process; and, in the alternative, an order for restitution to the NYS of Kshs.33,700,000.00 being the difference between the payments received and the actual value of materials supplied.
3. By the same judgment, the High Court also lifted and set aside preservation and injunctive orders issued by that court on 3rd May 2018 preserving an amount of Kshs.29,207,976.28 held in their bank accounts and a parcel of land, L.R. No. 14968/210 traced to the respondents by the applicant.
4. In her affidavit in support of the application, Catherine Ngari, an investigator with the applicant, deposes that the respondents secured the supply of items to the NYS at inflated prices through collusive bidding and stage managed competition resulting in the fraudulent acquisition by the respondents of Kshs.45,517,241.40 of public funds from the NYS; that the learned Judge erred in concluding that the applicant had not established its case to the required standard of balance of probabilities; that the intended appeal is merited and the intended appeal will be rendered nugatory if the restraining orders the applicant seeks are not granted, the funds in the said accounts will have been withdrawn.

5. In written submissions filed on behalf of the applicant, learned counsel Jackie Kibogy submitted that the intended appeal is arguable; that the learned Judge failed to appreciate that the respondents have a constitutional and statutory duty to comply with public procurement legislation and regulations; and that the learned Judge failed to properly consider the claims of collusion by respondents as bidders. On the nugatory aspect, counsel submitted that if the orders sought are not granted, the respondents will access the bank accounts and the amount in the said accounts will dissipate and the parcel of land disposed off. In support, counsel cited decisions of this Court in Kiru Tea Factory Company Ltd vs. Kenya Tea Development Agency Holdings & another, Civil Application No. NAI. 132 of 2017[2017] eKLR and Stanley Kangethe Kinyanjui vs. Tony Ketter & 5 others, Civil Application No. NAI 31 of 2012 [2013] eKLR.
6. The application is opposed. In a replying affidavit John Kago Murima, the 2nd respondent deposes that the claims of collusion are completely untrue, unfounded, misconceived and misguided as no evidence was led to demonstrate how and with whom the respondents allegedly colluded in order to get the award of the impugned tenders; that the tenders in question were voluntarily awarded to the 3rd respondent without any coercion; that through the assistance of the 1st respondent all the goods that were required under the tenders were supplied at a price of Kshs.45,517,241.40 including an element of profit; and that the respondents have never been employees of the NYS and did not have a hand in the invitation or the award of the tenders.
7. The 2nd respondent deposes further that the applicant did not present proof of its claims before the High Court to justify its claims; that the intended appeal is only meant for the public gallery and to frustrate the respondents; that the applicant has not established that it will suffer substantial loss as the amount it seeks to be preserved “is quantifiable, reversible and payable in damages in the unlikely event that the applicant succeeds in the appeal”.

8. He deposes further that if the Court is inclined to grant the orders sought by the applicant, it should do so on condition that the respondents are allowed to withdraw Kshs.9,690,734.88 from the said accounts being the amount in the said account in excess of the amount of money in issue.
9. Citing the decision of this Court in the case of Amina Shiraz Yakib vs. David Baburam Jagatram [2017] eKLR for the principles applicable in an application of this nature, counsel for the respondents, Musyoki Mogaka & Co Advocates in their written submissions dated 10th July 2020 submitted that the intended appeal is not arguable; that the applicant did not prove any fraudulent act by the respondents who were not and have never been employees of NYS; and that the prayer for restitution of the amount of Kshs.45,517,241.40 ignores the fact that goods were in fact supplied to NYS.
10. On the nugatory aspect, counsel referred to the decision of this Court in Nelson Andayi Havi vs. Law Society of Kenya & 3 others [2018] eKLR for the argument that denial of the orders sought will not render the intended appeal nugatory; that the applicant has not shown that the preserved properties, if released to the respondents will be irreversible and that, in any event, the respondents have the ability to refund the money if the appeal succeeds.
11. We have considered the application, the affidavits and the submissions. Counsel on both sides have addressed us on the established legal principles applicable when the Court is invited to exercise its discretion under Rule 5(2)(b) of the Court of Appeal Rules. Authorities abound that an applicant must satisfy the Court that the intended appeal is arguable and that unless the orders soughtare granted, the appeal if successful would be rendered nugatory. The authorities cited by counsel all support that position.

12. On the limb of arguability, the applicant contends that during the hearing of the appeal, it will urge, among other grounds of appeal, that the learned Judge erred in failing to address the question whether the respondents, as suppliers, have a duty to comply with the Public Procurement and Disposal Act and the Regulations thereunder; that the learned Judge erred in failing to find that every person, including a bidder, in the procurement process that entails expenditure of public finance has a responsibility to uphold the principle of prudent use of public resources; and that the learned Judge failed to address the question of collusion amongst the respondents as bidders. We are persuaded that the intended appeal is not frivolous. We think it is arguable.
13. As to whether the appeal will be rendered nugatory unless we grant the orders sought, the respondents have not demonstrated, beyond the statement that they are in a position to do so, that they have the ability to refund the amount in question if we decline the application and the appeal ultimately succeeds.
14. We are therefore satisfied that the applicant has satisfied the twin principles for the grant of an order of injunction pending the hearing and determination of the intended appeal in accordance with the jurisprudence underlying the consideration of the twin principles summarized by this Court in the case of Stanley Kangethe Kinyanjui vs. Tony Ketter & 5 others (supra). Accordingly, we allow the application in terms of prayer 3 of the application dated 25th June 2020 and hereby order that pending the hearing and determination of the intended appeal the respondents, whether by themselves their agents servants and or employees, are hereby restrained by order of injunction from withdrawing funds, transferring, disposing of wasting or in any other way dealing with the aforestated bank accounts, namely:
Account Number Account Name Amount
(Kshs.)
i. A/c No. 0020192678243 John Murimi Kago 11,744,462.33
Equity Bank

ii. A/c No. 0940197601341 Venyte Suppliers 787,634.95 Equity Bank
iii. A/c No. 1180263423271 Qsetters Investments 82,100,05
Equity Bank
iv. A/c No. 0260192617892 Joscate Sales and Supplies 704,974.45 Equity Bank
v. A/c No. 01109416161300 Catherine Nkirote Maingi 15,888,804.50
Co-operative Bank
TOTAL
29,207,976.28
15. The costs of the application shall abide by the outcome of the intended appeal.
Orders accordingly.
Dated and delivered at Nairobi this 4th day of September, 2020.
M.K. KOOME
..................................
JUDGE OF APPEAL
S. GATEMBU KAIRU, (FCIArb)
...................................
JUDGE OF APPEAL
J. MOHAMMED
..................................
JUDGE OF APPEAL
I certify that this is a true copy of the original.
Signed
DEPUTY REGISTRAR


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