Kenya Anti-Corruption Commission v Nabutola & 3 others [2022] KEHC 15253 (KLR)

Kenya Anti-Corruption Commission v Nabutola & 3 others (Anti-Corruption and Economic Crimes Civil Suit 30 of 2016) [2022] KEHC 15253 (KLR) (Anti-Corruption and Economic Crimes) (10 November 2022) (Judgment)

Neutral citation: [2022] KEHC 15253 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Anti-Corruption and Economic Crimes

Anti-Corruption and Economic Crimes Civil Suit 30 of 2016

EN Maina, J

November 10, 2022

Between

Kenya Anti-Corruption Commission

Plaintiff

and

Rebecca Nabutola

1st Defendant

Dr. Ong’ong’a Achieng

2nd Defendant

Duncan Muriuki

3rd Defendant

Maniago Safaris

4th Defendant

Judgment

Background 1. The Plaintiff, the defunct Kenya Anti-Corruption Commission and the predecessor of the Ethics and Anti-Corruption Commission, a public body established under the Ethics and Anti-Corruption Act, 2011.

2. At the material time relevant to this suit, the 1st Defendant was the Permanent Secretary in the Ministry of Tourism, the 2nd Defendant was the Managing Director of the Kenya Tourist Board (“KTB”), while the 3rd Defendant was a director of the 4th Respondent Company. He was also the Chairman of the Kenya Association of Tourist Operators (“KATO”) and also the Kenya Tourism Initiative (“KTI”).

3. The Plaintiff’s case is premised on a report received by KACC of embezzlement of public funds in the sum of Kshs.8,925,440/= by officers of the KTB and other persons through irregular procurement of services purportedly to organize a Permanent Secretaries’ trip to the Maasai Mara Game Reserve, a tourism award breakfast meeting and a breakfast meeting of the Minister for Tourism with media executives; that investigations established that Kshs. 8,925,440/- public funds were paid on behalf of KTB by the Catering and Tourism Development Levy Trustees (hereinafter “CTDLT”) to the 4th defendant yet the expenses for the trip had already been paid by KATO. Further that the procurement of the 4th defendant as an agent for the purported Permanent Secretaries’ trip was done exclusively by the 1st, 2nd, and 3rd defendants without the involvement of the tender committees of the KTB or of the Ministry of Tourism and without following the relevant procurement procedures. As a result, the KTB suffered a loss of Kshs. 8,925,440/-. The Plaintiff, therefore, filed this suit seeking orders inter alia that the court enters judgment against the defendants jointly and severally for the sum of Kshs. 8,925,440, interest and costs.

The Plaintiff’s case 4. The Plaintiff called a total of 7 witnesses who testified as follows:

5. Allan Wafula(PW 1) adopted his witness statement dated 4th February 2009 as his evidence in chief. He testified that he was the Chief Executive Officer of the Catering and Tourism Development Levy Trustees (CTDLT). That on 27. 12. 2006, the 1st Defendant, then Permanent Secretary-Ministry of Tourism and Wildlife wrote a letter dated 27th December 2006 (PEXH 1) requesting him for additional marketing funds in the sum of Kshs. 30 million for the KTB: that the board approved the request but gave a condition that the expenditure was to be approved by the Treasury first since the funding was outside the budget for that financial year. PW1 stated that through a letter dated 20th March 2007 (PEXH 2) he requested the Permanent st Defendant) to get approval from the Treasury. He stated that the 1st Defendant responded vide a letter dated 18th June 2007 (PEXB 3) that the treasury had approved Kshs. 39. 4 million. That he therefore paid the first installment of Kshs. 15 Million to the 1st defendant vide a letter produced as PEXH 6 dated 23rd July 2007. It was his evidence that the 1st Defendant acknowledged receipt of cheque No. 00800 for Kshs. 15 million to assist KTB through a letter dated 24th July, 2007 (PEXB 7) and that the 1st defendant, the 2nd defendant, and the 3rd defendant called him on the phone requesting the release of the balance of Kshs. 15 Million. He stated that he informed them that he was awaiting a formal request; that later he received a letter from KTBdated 24th September 2007 ( PEXHB 8) written by the 2nd defendant stating that KTB was partnering with the Ministry of Tourism to coordinate the trip of Permanent Secretaries to the Maasai Mara and that he should get in touch with the 3rd defendant who was the managing director of the 4th defendant which was coordinating the trip. He stated that the letter (EXBP.8) estimated the cost of the trip to be Kshs. 8,925,444/-. PW1 testified that two cheques were prepared one in favor of the 4th defendant for Kshs.8,925,444/- produced as PEXH 9 and another in favor of KTBfor Kshs.6,074,556/- produced as PEXH 10 and the same were forwarded to the 2nd defendant vide a letter dated 24th September, 2007 produced as PEXH11. Ministry of Tourism and Wildlife (the 1

6. PW2: Julius Masivo Sindani testified that he was the Finance Manager at CTDLT at the material time. He confirmed that a query was raised during an audit that some disbursements were not captured in the books of KTB. That the difference arose from payment of Kshs.8,925,444/- to the 4th defendant under the express instructions of the CEOthat it was needed urgently to facilitate the “safari” for Permanent Secretaries. He testified that the cheque was delivered to the office of the Permanent Secretary.

7. PW3 Fred Kaiguatestified that he was the CEO of the Kenya Association of Tour Operators (KATO). That the association was informed through the Association's Chairman, the 3rd defendant, of the intention to coordinate a trip for the forty (40) Permanent Secretaries to the Maasai Mara. That the board approved Kshs.500,000/- being KATO’s contribution for the trip. Those payments were made in two tranches: one vide cheque no. 003832 of Kshs.400,000/- vide requisition no 16646 dated 28. 9.2007 and paid directly to Norfolk Hotel and cheque no. 003848 for Kshs.100,000/- vide requisition number 16663 dated 5. 10. 2007 also paid directly to Norfolk produced as PEXH 12. PW3 further testified that later in January 2008, the 3rd defendant brought to the attention of the board a request to clear a deficit of Kshs. 298,579. 74/- accruing from the Permanent Secretaries’ trip, which deficit was in his company's name. Cheque no. 004302 for Kshs. 298,579. 80 vide requisition number 17105 paid directly to Norfolk Hotel produced as PEXH11 was prepared and paid directly to Norfolk hotel. Invoice number 9559 dated 5. 10. 2007 was issued together with receipt no. 13601 dated 20. 2.2008 for Kshs. 298,579. 80/-.

8. PW4 Ibrahim RashidAlitestified as follows that he was a credit manager at Norfolk Fairmont hotel. His testimony was that around 5th October 2007, he learned of a trip of the Permanent Secretaries which was being planned by Maniago Safaris Limited, the 4th defendant herein. That the booking was done by the 4th defendant on 4th October 2007 with clients named as PS group (permanent secretaries) comprising 30 numbers. The rooms booked were 30 single rooms for the night of 5th and 6 October 2007. That he generated invoice no 9559 for Kshs. 1,444,284. 20/- and invoice number 9562 Kshs. 17,185. 01 He produced the invoice as PEXH14, the reservation request voucher number as PEXH 13, and invoice number 9562 asPEXH 15. That the total computed charges were adjusted vide a credit of Kshs. 510,674. 47/- which he produced as PEXH20. That the total amount paid to Fairmont Hotel, Safari Mara Club by the 4th defendant was Kshs. 946,604. 80/-. He produced receipts issued to the 4th defendant as PEXH 16,17,18 and 19. That the amounts covered items like accommodation, lunch, drinks, and taxes and that the 4th defendant owes no money to Fairmont hotels for the Permanent Secretaries’ trip.

9. PW 5 Julie Topitian Njerutestified that:- she was the acting Managing Director of KTB, a position she has held from 4th November 2008. She was the head of administration under which the procurement section fell. That she was also the chair of the KTB tender committee through which KTB used for procurement of transactions of over Kshs. 500,000/- and above. That the first time she learned of the payments made to the 4th defendant was when the internal auditor one Ms. Mary Maina came to her to provide a statement on the transaction. That she went through all the minutes of the tender Committee for the period 2007/2008 when the transactions with the 4th defendant took place. She confirmed that payments made to the 4th defendant were made without the involvement of the tender committee of KTB and that Kshs 8,925,444/- was paid on 15 October 2007.

10. PW 6 Julius Kipng'etichtestified that at the material time he was the director of Kenya Wildlife Services (“KWS”); that through a letter dated 2nd October, 2007 (EXBP21) the 1st defendant requested him to provide a caravan, air plane and a helicopter to transport a team of 30 Permanent Secretaries to Maasai Mara; that he approved the request because it was a good opportunity for KWSto sensitize the Permanent Secretaries the challenges of conservation and tourism in Kenya using the Maasai Mara as an example; It was also an opportunity to further sensitize them on the wild-beast migration; that he provided a caravan and a helicopter which were used on 5 October 2007 and did not charge for the same. He stated that he later learned that the trip was being coordinated by KATO through its chairman the 3rd defendant who was also a board member of KTB. That he was, at that time, also a board member ofKTB, and KWS provided air transport to KTB at no cost.

11. PW 7 Gideon Mokayatestified that he was a forensic investigator with the Plaintiff between 2007 and 2015. That the accounting officer of the Ministry was the 1st defendant herein and it was her responsibility to budget for money allocated to her Ministry it was spent; that the 1st defendant had gone outside her mandate by approving a payment of Kshs. 400,000/= to the 4th Defendant. That there was a letter dated 24th August 2007 in which the 1st Defendant tried to reduce the costs of the trip; and that the letter implied that she was trying to save the Government's money. He stated that the 1st Defendant also asked Kenya Wildlife Service to provide a caravan and a chopper, which were provided; that KWS rendered the services of transporting the Permanent Secretaries to and fro. In respect of the procurement process, PW7 testified that the trip was not a matter of urgency; that as at the time the trip was sanctioned, KTB had a sitting Board and that the 2nd defendant was not a member of the tender committee ofKTBbut its Accounting Officer. Pw7 stated that the 2nd defendant authorized the payment of Kshs. 8,925,444/-; that the guests were accommodated at Fairmont Hotel; that flights and transport were provided by KWS. He (PW7) denied that there was a media consultative meeting. He testified that the 1st defendant did not give him any procurement documents on the Permanent Secretaries trip and contended that the trip should have been budgeted for and reflected in the budgeting estimates of the Ministry or Parastatal implementing the activity. He stated that there should also have been a payment voucher indicating the actual expenditure and invoices; that the payment voucher of Kshs. 400,000/- was a miscellaneous expense that would have been budgeted for as provided under the Public Finance Management Act and Public Procurement and Disposal Act; that the 4th Defendant Maniago safaris presented an invoice to the ministry indicating that there were extra expenses incurred. He was emphatic that there were no supporting documents in regard to the payment of Kshs.400,000/- as required.

12. PW7 testified that in regard to the payment of Kshs. 8,925,444/ = he did not see any contract. That there was only a letter from the 2nd defendant, instructing CTDLT to pay Kshs. 8,925,444/- for the trip. He stated since the idea of the trip was mooted in December 2007 there was no urgency for the procurement as provided under Section 74 of the PPDA2005 and the trip therefore ought to have been budgeted for in the 2008/2009 budget. He stated that there was no memo initiating the procurement nor was there any Local Service Order to indicate the commitment of the department to undertake the procurement. Further that the supplier, 4th Defendant merely requested to undertake the activity through a letter dated 19th September 2007 which was irregular as the procurement should have been initiated internally. Further, that the trip was fully paid for by the KATO. He stated that the payment was for Kshs. 500,000/- and was made through cheques No. 003832 of Kshs. 400,000/= and No. 003848 for Kshs. 100,000/=, he also contended that the payment should have taken place after the trip and not prior.

The Defence case 13. DW1 Rebecca Nabutola(1st defendant) adopted her witness statement dated 8th November 2018 as evidence and testified as follows: She confirmed that she was the Permanent Secretary of the Ministry of Tourism at the material time. That she did not conspire to grant a benefit of Kshs. 8. 9 million to the 4th Defendant. That she never held any formal meeting or any meeting at all with anyone regarding that money. That the funds were not paid by the Ministry of Tourism but from a parastatal known as Catering Tourism Level (CTDLT). She denied writing any letter to CTDLT to pay that amount to anyone. That the Ministry was not involved in any procurement by CTDLT and that she was not the accounting officer. That she delegated her functions at the Ministry. She produced as DExh a decision of the High Court in HCCRA No. 232 of 2012Rebecca Mwikali Nabutola and 2others v Republic [2016] eKLR stated that she was exonerated and urged this court to dismiss this case.

14. DW 2 Dr. Ong’ong’a Achieng(2nd Defendant) relied on his statement dated 2nd May 2017 and then testified as follows:-that he was the Managing Director of the KTB. About the trip in issue, he was alerted about it by the Permanent Secretary Ministry of Tourism & Wildlife (1st Defendant). The trip was a joint effort/initiative of the stakeholders, the Ministry of Tourism, and the KTB and the role of KTB was overall coordination of the trip to ensure that it was successful. He stated that the function of KTB was to market Kenya as a tourist destination and to promote existing tourism products locally and internationally; that the expenditure for the trip was to be approved by the CTDLT as KTB had no funds at the time; that the trip was coordinated by the Ministry of Tourism, KTB, the private sector and Maniago Safaris. He stated that the cheque for the sum in issue was addressed to Maniago Safaris by the CTDLT. He produced a bundle of documents marked as DExh 2.

15. DW4 David Nguro Kangetestified that at the material time he was the General Manager of the 4th Defendant. That in respect of the Mara trip by the Permanent Secretaries, the same was facilitated by the 4th Defendant at the behest of the Kenya Tourism Initiative (KTI). He made the arrangements for transport and accommodation at the Mara Fairmont. That the Permanent Secretaries then moved to Trans Mara and Narok where the 4th Defendant paid for the park fees. He stated that although he was not physically present at the Mara, he coordinated the trip from the office; that the Permanent Secretaries were to be flown to the Mara and the 4th Defendant had booked the flights, but this was changed upon a request to the KWS to provide them with a caravan and aircrafts. PW4 testified that the budget for the trip was Kshs. 8,924,444 which is the estimates the 4th Defendant gave to the Kenya Tourism Initiative (“KTI”); that there was no engagement with any government entity and further that the service providers were paid in advance and the 4th defendant did not receive any refunds for cancellations. Pw4 also stated that the company engaged the media to highlight the trip; that the 3rd Defendant was acquitted of criminal charges arising from the same facts of this case. On being cross examined he confirmed that there was no contract in respect of the trip between it and the Ministry or KTB and further that the invoices for Ksh. 8 million were paid by the Ministry of Tourism. He did not produce receipts for the amounts paid to the suppliers and it was his evidence that he did not have a budget.

16. DW5 Anabella Bargonothe Chairman of the 4th Defendant adopted her witness statement. In cross-examination, she testified that she did not participate in the trip in any way; that she did not receive any document authorizing the 4th Defendant to organize the trip; That there was no contract between the 4th Defendant and the ministry regarding the trip and that the 4th Defendant received payment for the trip from the CTDLT. She also stated that the trip was undertaken and the money was spent.

17. After the close of the defense case, all the parties filed their respective written submissions which I have fully considered as I analyzed the evidence adduced by the parties.

Analysis and determination: 18. From a review of the pleadings, the evidence and the submissions filed, the following issues arise for determination:a.Whether the Plaintiff has locus to bring these proceedings.b.Whether this suit is res judicata on account of HCCRA No. 232 of 2012 Rebecca Mwikali Nabutola and 2others v Republic [2016] eKLR.c.Whether the 4th Defendant was unjustly enriched by receiving payment of Kshs. 8,925,440 from Kenya Tourist Board for no consideration.d.Whether the Defendants are liable to compensate the Kenya Tourist Board Kshs. 8,925,440 with interest.e.Costs.

Issue (a) Whether the plaintiff has locus to bring these proceedings 19. It is the 1st defendant’s contention that the plaintiff has no locus to institute these proceedings as the funds were not public funds as the the funds were not paid by the Ministry of Tourism but by a parastatal known as Catering and Tourism Development Levy Trustees (CTDLT).

20. It is evident and it was admitted by DW4 and DW5, that the sum of Kshs.8,925,444/= was paid to the 4th defendant by the Catering and Tourism Development Levy Trustees (CTDLT) through a voucher No.846. The payment was made pursuant to a letter Ref. KTB 805, dated 25th September, 2007 which was written by the 2nd Defendant instructing CTDLT to make the payment.

21. The CTDLT was a statutory body established under Section 18(1) of the Hotels and Restaurants Act, Cap 494, now repealed. The function of the CTDLT which was a body corporate (See Section 18(2) of the Act) was to inter alia administer the Catering and Tourism Development Fund, to establish, equip and control establishments for training of persons for employment in hotels and restaurants as approved by the minister and to make payments out of the fund to be used by the Kenya Tourist Board (KTB) to promote Kenya as a tourist destination both locally and internationally. Upon repeal of the Act the CTDLT was replaced by the Kenya Tourists Development Fund also a body corporate established under section 8(1) of the Kenya Tourists Board Order, 1997 which in turn was established under Section 3(1) of the State Corporations Act (Cap 446). For all intents and purposes therefore, even upon repeal of the Act, the CTDLT was a State Corporation as defined under section 2 of the State Corporation Act which states:-“State corporation means(b)A body corporate established before or after the commencement of this Act by or under an Act of Parliament or other written law but not.........” (not relevant)

22. It is my finding that the CTDLT and its successor the Tourist Development Fund being a state corporation are public bodies as defined in section 2(1) of the Anti-Corruption and Economic Crimes Act which states: -“Public body means:-(a).........................(d)any corporation, council, board, committee or other body which has power to act under and for the purposes of any written law relating to local government, public health or undertakings of public utility or otherwise to administer funds belonging to or granted by the Government or money raised by rates, taxes or charges in pursuance of any such law; or(e)a corporation, the whole or a controlling majority of the shares of which are owned by a person or entity that is a public body by virtue of any of the preceding paragraphs of this definition.” (Emphasis mine)

23. Among the Plaintiff’s and its successor the Ethics & Anti-Corruption Commission core function is to inter alia, institute recovery proceedings for the purposes of protection of public funds. The Plaintiff is also empowered by Section 53(3) of the Anti-Corruption and Economic Crimes Act to recover amounts recoverable by public bodies under Section 51 and 52 of the Act. The said sections provide:-“11(1)(j)institute and conduct proceedings in court for purposes of the recovery or protection of public property, or for the freeze or confiscation of proceeds of corruption or related to corruption, or the payment of compensation, or other punitive and disciplinary measures.“51. Liability for compensationA person who does anything that constitutes corruption or economic crime is liable to anyone who suffers a loss as a result for an amount that would be full compensation for the loss suffered.52. ..........53. Liability – miscellaneous provisions.......(3)An amount for which a person is liable under section 51 or 52 to a public body may be recovered by the public body or by the Commission on its behalf.(4)For greater certainty, nothing in the Government Proceedings Act (Cap.40) prevents the Commission from instituting civil proceedings to recover amounts under subsection (3). .......” (underlining mine)

24. The above stated provisions of the law leave no doubt that the Plaintiff indeed has the locus to bring these proceedings and I need not say more.

Issue (b) Whether this suit is res judicata on account of HCCRA No. 232 of 2012 Rebecca Mwikali Nabutola & 2 others v Republic [2016] eKLR. 25. The 4th Defendant has contended that this suit is res judicata on account of the decision in the afore stated appeal. It is his contention that the said appeal conclusively determined the issues being raised in these proceedings.

26. Section 7 of the Civil Procedure Act upon which he relies provides as follows regardingres judicata:“7. No court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such court.”

27. It is however instructive that HCCRA No. 232 of 2012 which was an appeal against the conviction of and the sentences imposed against the Defendants in CMACC No. 17 of 2009, was exclusively concerned with the criminal culpability of the Defendants but not their civil liability. In the case of Kenya Revenue Authority v Jimmy Mutuku Kiambu [2015] eKLR Ochieng J, as he then was, stated of the above two elements, and I agree:-“43. It is important to distinguish between criminal culpability and civil liability.44. A person is only said to be criminally culpable upon his being convicted for a criminal offence. And in order for the court to find somebody criminally culpable, the evidence adduced must prove the guilt of that person beyond any reasonable doubt.45. On the other hand, when a person is found, on a balance of probability, to be responsible for his acts or omissions, he is said to be liable.”

28. It is also trite that in matters such as the one before me, criminal proceedings are targeted at the offender/accused person while civil recovery proceedings are targeted at the property of the offender in order that they may not benefit from their criminal conduct. Further it is trite that a claim for civil recovery can be determined on the basis of conduct in relation to property without necessarily proving an actual offence – See the case of Kenya Anti-Corruption Commission v Stanley Mombo Amuti [2017] eKLR where the court stated:-“This is a claim for civil recovery. A claim for civil recovery can be determined on the basis of conduct in relation to property without the identification of any particular unlawful conduct. The Plaintiff herein is therefore not required to prove that the Defendant actually committed an act of corruption in order to invoke the provisions of the ACECA. In the case of Director of Assets Recovery Agency & Ors, Republic versus Green & Ors [2005]EWHC 3168, the court stated that:“In civil proceedings for recovery under Part 5 of the Act the Director need not allege the commission of any specific criminal offence but must set out the matters that are alleged to constitute the particular kind or kinds of unlawful conduct by or in return for which the property was obtained.” I opine that forfeiture is a fair remedy in this instance as it serves to take away that which was not legitimately acquired without the stigma of criminal conviction. ......”

29. I have perused the judgment inHCCRA 232 of 2012 and found that the Judge did not deal with the issue of restitution. The proceedings before me were brought to recover funds unlawfully paid out of the CTDLT Fund and are therefore aimed at restitution. As stated earlier the Plaintiff is empowered to bring the recovery proceedings under Section 11(i)(j) of its own Act and also under Part VI of the Anti-corruption and Economic Crimes Act (Sections 51 and 53(3) & (4).It is my finding therefore that the proceedings are properly before this court and are not res judicata the proceedings in the criminal appeal. While the two cases involved issues that are similar and the same involve the state and the Defendants they are brought under completely distinct realms of the law and indeed the standard and onus of proof are different. Here the standard of proof is on a balance of probabilities while in the criminal proceedings it was proof beyond reasonable doubt.

Issue (c) Whether the 4th Defendant was unjustly enriched by receiving payment of Kshs. 8,925,440 from Kenya Tourist Board for no consideration 30. The Plaintiff contended that the services of the 4th Defendant were procured without following procurement procedures under the Public Procurement and Disposal of Assets Act 2005 (now repealed); that the tendering process was irregular and unlawful as the tender evaluation committee of the KTB was not involved; that there was no contract between the KTB and the 4th Defendant as required under the law and that therefore the payment made to the 4th Defendant was unlawful.

31. I have carefully considered the evidence and submissions by the parties. PW4 a credit manager at Fairmont Mara testified that Kenya Association of Tour Operations (KATO) paid for the accommodation of the Permanent Secretaries in two tranches: first, vide cheque No. 003832 for Kshs. 400,000/- vide requisition no 16646 dated 28. 9.2007 which was paid directly to Norfolk Hotel and second through a cheque No. 003848 for Kshs. 100,000/- vide requisition No. 16663 dated 5. 10. 2007 also paid directly to Norfolk (PEXH 12). Further, that after the trip, an outstanding invoice of Kshs. 298,579. 74 was paid directly by KATO to Fairmont on 20th July 2008, all these towards accommodation. PW4 testified that the total amount paid for the trip was Kshs. 946,604. 80/- and no amount was left outstanding. He produced the receipts for the amount as PEXH 16,17,18 and 19.

32. PW6 the then Director of the Kenya Wildlife Service (KWS) testified that KWSprovided the transport for a team of 30 Permanent Secretaries to and from the Maasai Mara using a caravan, airplane and helicopter belonging to KWS. It was his evidence that KWS did not charge anything as that was its own contribution to the initiative. On the other hand Daniel Nguro (DW4) and Anabela Bagarno (DW5) who were witnesses for the 3rd and 4th Defendants confirmed that a sum of Kshs.8,925,440/= was paid to the 4th defendant for the trip. DW4 testified that it is the 4th defendant that did the estimates for that sum and that the 4th Defendant was given the business because it was the leader in the tourism industry. On her part DW5 admitted that no contract was drawn up in regard to the trip. She contended that because the trip was undertaken money had to be paid.

33. It was the Defendants’ contention that the tendering for the trip ought to have been done by the CTDLT but not by KTB. The Defendants made several references to the Judgement of the court in HCCRA No. 232 of 2012.

34. In the criminal appeal the court found that fraud was not proved against the 1st and 2nd defendants. The court however upheld the convictions of the 1st and 2nd defendants on the charges of willful failure to comply with the law relating to procurement and stated:-“The question therefore, is whether the 1st appellant’s actions amounted to willful or careless failure envisaged under Section 45(2)(b). I find that her defence that she was not concerned with procurement untenable. She took responsibility when she received the invoice and gave direction for its payment. Maniago Safaris was not procured by the ministry. The justification for the payment was that it was a contribution for the trip. However, even that claim is not supported by any prior process of procurement or outlined budget on the basis of which such a contribution would have been justified. While it was the duty of the prosecution to proof the charges, it is not lost to this court that it is the 1st appellant who introduced the claim that the payment was contribution of a larger expenditure shared among stakeholders. She admitted that the Ministry was not presented with any specific budget as a stakeholder, and added that she had no idea how much each stakeholder was required to pay, including the Kenya Tourism Board. It appears to me that in this context, the 1st appellant incurred an expense without reference to any applicable law and procedure. In my view, the actions and omissions of the 1st appellant amount to careless failure in this regard. As the accounting officer in the ministry, she was enjoined to ensure that public funds under her charge were incurred prudently and in accordance with the law and procedures. I find that this charge has been proved. The 1st appellant was an accounting officer within the meaning of section 3 of the Public Procurement and Disposal Act. Section 3(a) defines an accounting officer as:‘for a public entity other than a local authority, the person appointed by the Permanent Secretary to the Treasury as the accounting officer or, if there is no such person, the chief executive of the public entity;…’Section 27 provides that an accounting officer shall be responsible for ensuring that the public entity charged under him complies with the regulations and any directions with respect to each of its procurements. The Act also requires that a procuring entity should have a procurement plan in line with its budgeting process.”I agree wholly with the above findings. It is my finding that the above findings are a crusification rather than an exoneration of the 1st and 2nd Defendant.

35. The court proceeded to state the following in regard to the participation and culpability of the Appellants and again I agree fully with its finding: -“If Maniago Safaris’ engagement was a result of direct procurement, it ought to have been in accordance with Section 29(3) of the Public Procurement and Disposal of Assets Act, which requires approval by the tender committee. I find that the prosecution has sufficiently shown that the proper procurement procedure was not followed. None of the documentation presented was in relation to the subject matter. Section 27(1) of the Public Procurement and Disposal Act provides that:Subject to the Act, all approvals relating to any procedures in procurement shall be in writing and properly dated, documented and filed.The 3rd appellant sought to justify payment to Maniago as shown in the evidence but distanced himself on how Maniago Safaris was procured. The two must go hand in hand and he ought to have provided a reasonable explanation as the accounting officer of Kenya Tourism Board. As long as public funds were to be expended whether by contribution or otherwise, the expenditure ought to have undergone the requisite procurement procedure. In line with Section 27, the 3rd appellant being the managing Director bore the responsibility of ensuring the Kenya Tourism Board complied with the procurement laws. The 3rd appellant failed in this respect, and I therefore, confirm the 3rd appellant’s guilt on Count VI as charged.”The court held further that:-““The attempt to explain that the subject payment was made by the CTDLT and further that the Kenya Tourism Board was not involved in the planning and financing the trip also fails. The communication by the 3rd appellant to PW5 gives a clear indication. The funds paid, as directed by the 3rd appellant were drawn from the additional budget of Ksh. 30 million approved by the Treasury. This could not therefore have been said to be the CTDL’s funds having been allocated to the Tourism Board. The 3rd appellant’s response to PW3 also shows that he owned the payments in question by justifying them as proper and directing PW3 to include them in the book of accounts. Were it otherwise, the 3rd appellant ought not to have received and forwarded the payment to Maniago Safaris. It is also peculiar on the 3rd appellant’s part to argue that he did not engage Maniago Safaris, yet went ahead to accept a budget presented to him and to authorize payment on the same. The said budget was presented by the same company that alleged to have been appointed to coordinate the trip. As a prudent office, he ought to have questioned the process, and subjected this engagement through the procurement process. Instead, the 3rd appellant unilaterally took it up and asked PW5 to make the payment and delivered the cheque himself, against the requirement of Section 26(3)(c) which requires that all procurement procedures should be ‘handled by different offices in respect of procurement initiation, processing and receipt of goods, works and services. The obvious objective behind this requirement is to among others ensure transparency and accountability in public processes and related expenditure.The evidence shows that the 3rd appellant took responsibility when he authorized payment to Maniago Safaris. It is not enough therefore for him to say that he did not participate in the company’s procurement. He ought to have subjected the presentation by Maniago Safaris through the procurement process. As PW1 and PW2 confirmed, no such procurement was presented. This manifests a deliberate disregard of the procurement laws and procedures, yet the Board was incurring an expenditure. The explanation of urgency of the payment is not an excuse for flouting procurement procedures.”

36. I also concur with the finding of the court that the process of engaging the services of the 4th Defendant was in total disregard of the provisions of Section 74(3) as read with Section 29(3) of the Public Procurement and Assets Disposal Act, 2005 and that the 3rd and 4th Defendants must also bear responsibility for accepting a business and a payment that did not follow the procurement process.

37. It is also my finding that the procuring entity, the Kenya Tourist Board (KTB), being a public body was governed by the mandatory provisions of Section 74 of Public Procurement and Disposal Act, 2005 (repealed). Julie Topitian Njeru PW5 told this court that at the material time she was the Head of Administration at the KTB and that procurement was under her docket. She testified that she was as a matter of fact in-charge of the Tender Committee. She was emphatic however that the issue of the payment of Kshs.8,928,000 was not taken to the Tender Committee and hence it was not approved. It was therefore proved on a balance of probabilities that the sum of Kshs.8,925,440 was paid without following procurement procedures – there was no budget, no tender and no contract between the procuring entity and the 4th Defendant. The payment was therefore an unlawful payment. Moreover given that this court was told that the actual cost for the trip was Kshs.946,604/= (see testimony of PW4) and that the said sum was fully paid it is not clear why the 4th defendant needed to be paid an additional sum of Kshs.8,925,440/-. The allegation by the plaintiff that the additional expenditure was necessary was not rebutted. It is not sufficient to state as DW5 did that the trip had to be paid for as it had taken place. Like the 1st and 2nd Defendants, the 3rd Defendant and the 4th Defendant being the supplier had a responsibility under the then Section 27(4) of the Public Procurement and Disposal Act, 2005 to see to it that the law was followed. The Section stated:-“27(4)Contractors, suppliers and consultants shall comply with all the provisions of this Act and the regulations.”

38. In my view, the Plaintiff has proven on a balance of probabilities that 4th Defendant was unjustly enriched by receiving payment of Kshs. 8,925,440 public funds from Kenya Tourist Board albeit through the CTDLT. As I have stated for this amount to be paid there needed to be a proper procurement process which was lacking. The fact that the 1st, 2nd and 3rd Defendants did not personally benefit from the sum paid does not absolve them form liability. It is sufficient that their conduct occasioned a loss to the public body. (See Section 51 of the Anti-Corruption and Economic Crimes Act)

Issue (d) Whether the Defendants are liable to compensate the Kenya Tourist Board Kshs. 8,925,440 with interest 39. Having found that the 4th Defendant was unjustly enriched through payment of public funds to the tune of Kshs. 8,925,440 and that a loss was occasioned to the CTDLT/KTB. It is my finding that under Sections 51 of the Anti-Corruption and Economic Crimes Act the Defendants are all liable for that loss.

40. The liability of the Defendants in regard to the loss arise as follows:a.The 1st Defendant was the Permanent Secretary and the accounting officer for the Ministry of Tourism & Natural Resources. As Accounting Officer it was her responsibility to ensure there was a work plan and budget before any funds allocated were spent. While the trip of the Permanent Secretaries to the Masai Mara was important for tourism in this country the 1st defendant ought to have ensured that the procurement law was observed as indeed under Section 27(2) of the Public Procurement and Disposal Act the primary responsibility to ensure that her Ministry which is a public entity followed the law fell on her. It is no wonder that her conviction for the offence of willful/careless failure to adhere to procurement procedures was upheld by the High Court. She did not appeal and Section 47A of the Evidence Act therefore kicks in. Section 47A of the Evidence Act states: -“47A.Proof of guiltA final judgment of a competent court in any criminal proceedings which declares any person to be guilty of a criminal offence shall, after the expiry of the time limited for an appeal against such judgment or after the date of the decision of any appeal therein, whichever is the latest, be taken as conclusive evidence that the person so convicted was guilty of that offence as charged.”b.The 2nd defendant who was the Managing Director of KTB wrote a letter dated 24th September 2007 (PEXH 8) stating that KTB was partnering with the Ministry of Tourism to coordinate the Permanent Secretaries trip to the Maasai Mara and that the Chief Executive Officer CTDLT was to get in touch with the 3rd Defendant who was the Managing Director of the 4th defendant who was coordinating the trip. The 2nd Defendant requisitioned for the funds from CTDLT, despite being fully aware that the costs for the trip had been catered for byKATO and the transport provided for by KWS. For that reason in the criminal appeal the Judge described his conduct as “fraudulent”. It is my finding that the 2nd Defendant’s liability has also been proved on a balance of probabilities as he ought not to have given instructions for the release of the money without ensuring that the proper procurement process had been observed. As a public officer he had a responsibility to do so. Moreover having been convicted for an economic crime a conviction which was upheld by the Court of Appeal he is equally liable under Section 51 of the Anti-corruption and Economic Crimes Act to compensate the successor of the CTDLT for the loss. The law states that the funds shall be deposited in the Consolidated Fund – See Section 56 C(1) of the Anti-Corruption and Economic Crimes Act.c.The 3rd Defendant was the Chairman of KATO, and the CEO of the 4th Respondent. He was part of the committee that made arrangements for the trip and was fully aware that KATOhad paid for the trip. Despite that he received the funds and forwarded the same to his company, the 4th Defendant, knowing very well that there was no procurement either for the 4th defendant to render the services for the trip or for the sum paid. As I have stated both the 3rd Defendant and the 4th Defendant had a responsibility to ensure compliance with the Act – (See Section 27(4) of the Act) which states:-“27(4)Contractors, suppliers and consultants shall comply with all the provisions of this Act and the regulations.”d.I am therefore satisfied on a balance of probabilities that he too is also liable.e.The 4th Defendant irregularly and unlawfully received the Kshs. 8,925,440/- as the procurement process leading to the payment was not followed. There was no tender, no contract and the money was not accounted for. It is my finding that it is equally liable as Section 27(4) of thePublic Procurement and Disposal Actof 2005 placed a responsibility upon it as a supplier. It also ought not to benefit from money paid to it unlawfully.

Costs 41. Costs follow the event and as the plaintiff has succeeded against the defendants the costs of the suit shall be awarded to it.

Disposition 42. The upshot is that the Plaintiff’s claim against the Defendants succeeds and orders are granted as follows:-a.That judgment is entered for the Plaintiff against the defendants jointly and severally for the sum of Kshs.8,925,440/=.b.That interest shall be at court rates from the date of filing suit until payment in full.c.That the costs of the suit are awarded to the Plaintiff.

SIGNED, DATED AND DELIVERED VIRTUALLY ON THIS 10TH DAY OF NOVEMBER, 2022. E N MAINAJUDGE