Case Summary: Mater Hospital v Dr. John Muriithi & Others (Civil Appeal No. 20 of 2019)
The Court of Appeal has recently decided that victims of corruption or economic crimes can seek compensation for losses, independent of the criminal justice process. The court held that private persons could file civil claims for asset recovery under sections 51 and 52 of the Anti-Corruption and Economic Crimes Act (ACECA) without a prior criminal conviction.
The case arose from a suit by the Registered Trustees of the Sisters of Mercy (trading as Mater Hospital) against five employees: Dr. John Muriithi, Joice Onyango, Judith B.O. Nyakundi, Duran Ligaga Amuyunza, Susan Kagendo Karanja and Sheer Logic Management Consultants Ltd, a human resource firm. Mater Hospital alleged that the respondents, through collusion and fraudulent acts, misappropriated Kshs. 127,836,053 and sought compensation.
The High Court had earlier ruled that such claims require a prior criminal conviction under Section 54 of ACECA and transferred the case to the Civil Division, stating that it did not fall under the Anti-Corruption and Economic Crimes Division.
Dissatisfied with this interpretation, Mater Hospital appealed.
The Court of Appeal clarified that sections 51 and 52 of ACECA do not require a prior criminal conviction to precede civil recovery proceedings. It held that these sections provide an avenue for victims of corruption or economic crimes to seek compensation for losses, independent of the criminal justice process. The Court
of Appeal emphasised that the term ‘constitutes’ in these provisions refers to the nature of wrongful conduct rather than requiring proof of guilt in criminal proceedings.
The Court also explained that civil claims under Sections 51 and 52 should be filed in the Civil Division of the High Court or in subordinate courts where appropriate. These claims are distinct from compensation orders under Section 54, which are tied to criminal convictions.
The judges highlighted that imposing a prerequisite criminal conviction would unfairly burden victims of corruption, given the higher standard of proof required in criminal cases. Civil claims operate on the balance of probabilities and provide a more accessible route for victims to recover losses.
Ultimately, the Court allowed Mater Hospital to pursue its claim in the Civil Division and dismissed the respondents’ cross-appeal seeking to strike out the suit. This decision affirms the right of private parties to seek civil remedies under ACECA independently and clarifies the procedural paths for such claims.
“This decision should bring some respite to the victims of con jobs in Kenya, such as gold scams or other online frauds” said Ochiel Dudley, Partner at Bond Advocates LLP who has represented many victims of gold scams in Kenya. “However, the key is to conduct sufficient due diligence before payment. That is something Bond Advocates LLP has done for many clients thus saving them from fraud, he continued.
If you need to file forfeiture proceedings for compensation for losses due to economic crime or corruption, you can contact the expert dispute resolution team at Bond Advocates LLP.
