The Court of Appeal has dismissed with costs an application by the Assets Recovery Agency (ARA) seeking to stay the execution of a High Court judgment allowing former Nairobi Governor Mike Sonko to get back Sh537 million frozen in bank accounts linked to him.
The agency had claimed the cash were proceeds of crime.
In a judgement delivered on Wednesday by a three-judge bench comprising Justices Kathurima M’inoti, Chacha Mwita and Bryam Ongaya, the appellate court ruled that the court lacks jurisdiction to grant a stay of execution against what it termed a “negative order” issued by the High Court.
“To the extent that ARA an order of stay of execution against a judgement dismissing the suit, this court cannot issue such an order. Accordingly, the applicant’s notice of motion dated January 22, 2025 has no merit and is hereby dismissed with costs to the respondent. It is so ordered,” the court ruled.
The judges also found that the High Court judgment delivered on October 1, 2025 merely dismissed the forfeiture suit filed by ARA and did not direct any party to take action or refrain from doing so.
The court emphasised that the settled legal principle that a stay of execution under Rule 5(2)(b) of the Court of Appeal Rules cannot be issued against a negative order.
“A dismissal of a suit does not amount to a decree capable of execution, save for costs,” the judges noted, adding that the appellate court cannot stay a judgment that does not impose any enforceable obligation.
Former Nairobi Governor Mike Mbuvi Sonko during the hearing of a graft case against him at the Milimani Law Courts in Nairobi on February 4, 2026.
Photo credit: Billy Ogada | Nation Media Group
ARA had moved to the Court of Appeal seeking to suspend the decision of High Court Judge Nixon Sifuna, who dismissed the agency’s forfeiture suit with costs and lifted preservation orders that had frozen the funds since February 2020.
In that judgment, the High Court found that ARA had failed to demonstrate that the money in question constituted proceeds of crime, faulting the agency for selective investigations, absence of key witness statements and reliance on unverified property sale agreements.
During the hearing of the stay application, Justice M’inoti questioned ARA’s counsel on what exactly the court was being asked to suspend, noting that the High Court decision merely dismissed the suit.
Similarly, Justice Mwita questioned how the court could stay a decision that simply struck out a claim.
ARA’s lawyer Esther Muchiri argued that Section 97 of the Proceeds of Crime and Anti-Money Laundering Act (POCAMLA) provides that preservation orders remain in force once an appeal has been filed, and maintained that the funds should remain frozen pending the determination of the appeal.
However, the bench declined to interpret Section 97 within the framework of an application brought under Rule 5(2)(b), with Justice M’inoti observing that if preservation was automatic under the law, then the stay application would have been unnecessary.
Faced with the court’s position, Mr Muchiri opted to withdraw the application, a move that was not opposed by Senior Counsel Harrisson Kinyanjui, who appeared for Mr Sonko, but asked the court to award costs.
The Court of Appeal consequently marked the application as withdrawn and found that the Notice of Motion dated January 22, 2026 lacked merit, effectively clearing the way for the release of the Sh537 million.
