The Court of Appeal has finally declined to suspend a High Court ruling that ordered the unfreezing of millions of shillings belonging to former Nairobi Governor Mike Sonko Mbuvi Gideon Kioko, dealing a setback to the Assets Recovery Agency (ARA) in its attempt to keep the funds frozen.

In Civil Appeal No. E923 of 2025, the appellate court on Wednesday, March 4 considered an urgent application by ARA seeking stay orders to halt the High Court decision pending the hearing and determination of its appeal. However, the three-judge bench declined to grant the orders, effectively allowing the earlier High Court ruling to remain in force.

The dispute revolves around funds that had previously been frozen as part of investigations by ARA under the Proceeds of Crime and Anti-Money Laundering Act (POCAMLA). By refusing to grant a stay, the Court of Appeal left the High Court order intact, meaning the directive unfreezing the funds remains valid for now.

As a result, Sonko can access the money unless the appellate court reaches a different determination when the substantive appeal is heard. Sonko was represented by J. Harrison Kinyanjui & Co. Advocates during the proceedings.

Earlier, ARA had written to Equity Bank directing the lender to maintain the freeze on Sonko’s accounts, citing ongoing legal proceedings and preservation orders linked to the appeal. The agency indicated that the High Court had issued interim orders on October 14, 2025, staying execution for 30 days to allow it to move to the Court of Appeal and instructed the bank not to release the funds while the appeal was pending. ARA subsequently filed Civil Appeal No. E923 of 2025, challenging the High Court judgment delivered on October 1, 2025, and maintained that preservation orders under POCAMLA should remain in force until the appeal is determined.

However, the Court of Appeal’s refusal to grant the stay orders means the agency’s earlier directive to Equity Bank to continue freezing the accounts has effectively been overtaken by events as the appeal proceeds.

The latest development comes against the backdrop of a separate decision by the Tax Appeals Tribunal in November 2025, which also addressed restrictions placed on Sonko’s bank accounts. The tribunal ordered the Kenya Revenue Authority (KRA) to lift agency notices that had been issued against Sonko’s accounts at Equity Bank Kenya Ltd and Co-operative Bank of Kenya Ltd, affecting several accounts held in both Kenya shillings and US dollars.

In its ruling delivered on November 14, 2025, tribunal member Dr. Rodney O. Oluoch held that the taxes cited in the agency notices were disputed and had not yet been determined. The tribunal ruled that the amounts were therefore not collectible pending the hearing and determination of the tax appeal, meaning KRA could not enforce the agency notices or recover the contested tax amounts from Sonko’s accounts while the tax dispute remains unresolved.

With the Court of Appeal now declining to stay the High Court order, the combined effect of the rulings is that the restrictions that had previously limited access to Sonko’s bank accounts have been significantly eased, at least for now, as the legal battles continue in court.