The Judgment Is Worthless If They Can Help Him Hide the Money

Here is a situation most litigating advocates in Kenya know intimately. Your client sues. Your client wins. The court issues a decree. And then – nothing. The debtor has, somehow, no assets. The bank account is empty. The car is registered to a cousin. The office equipment was “sold” two weeks before judgment. The business has been quietly moved into a new company with a slightly different name.

Everyone in the room knows what happened. The debtor moved the money before you could touch it and someone helped him do it. A director. A spouse. A business partner. Someone who knew the judgment was coming and made sure there would be nothing left when it arrived.

Under current Kenyan practice, your options at that point are limited and largely ineffective. You can apply for attachment of whatever the debtor still nominally owns. You can try a garnishee order on bank accounts that turn out to be empty. If the transfer was egregious enough, you might try to unwind it under the Insolvency Act. But the person who actually helped the debtor, the one who took the assets, held the money, arranged the transfers, walks away untouched. There is no direct civil cause of action against them in Kenyan tort law. Not yet.

That is the gap the Marex tort fills. And Kenyan courts can apply it today.

What Happened to Marex

In July 2013, the English Commercial Court delivered judgment in favour of Marex Financial Ltd against two BVI commodity trading companies for US$5.5 million. The companies were owned and controlled by a man named Carlos Sevilleja. A draft of the judgment was circulated to the parties before formal hand-down which is standard practice in the UK.

What was not standard was what happened next. In the days between receiving that draft and the judgment being formally handed down, Sevilleja transferred approximately US$9.5 million from the companies’ London bank accounts into his personal control. He then put both companies into liquidation. By the time the decree was perfected, there was nothing left to enforce against.

Marex sued Sevilleja personally. The theory: by stripping the companies of their assets after seeing the draft judgment, he had knowingly induced and procured the companies to violate Marex’s rights under that judgment. He had intentionally caused Marex loss by unlawful means. In other words, he had committed a tort.

The UK Supreme Court, in Sevilleja v Marex Financial Ltd [2020] UKSC 31, unanimously found that this cause of action was legally sound. The reflective loss principle – which prevents shareholders from suing for diminution in share value that merely reflects company losses – did not apply, because Marex was a creditor, not a shareholder. The tort claim could proceed.

The following year, in Lakatamia Shipping Co Ltd v Nobu Su [2021] EWHC 1907 (Comm), Mr Justice Bryan confirmed and crystallised the elements of what practitioners now call the Marex tort – this time holding a debtor’s mother personally liable for €27 million and US$857,000 after she helped her son dissipate two Monaco villas and a private jet in breach of a worldwide freezing order. The court awarded compensatory damages precisely equivalent to the dissipated assets.

What You Have to Prove

The Marex tort is developed by analogy with the tort of inducing breach of contract, which traces its lineage to Lumley v Gye (1853) and has been part of the common law for over 170 years. The logic is simple: if the law protects against a third party who induces someone to break a contract, there is no principled reason why it should not equally protect against a third party who induces someone to violate a court judgment. One is a private arrangement. The other is an order of the state. If anything, the case for protection is stronger.

To establish the Marex tort, you must prove five things:

• A valid judgment was entered in your favour
• The judgment debtor failed to satisfy it (the breach of judgment rights)
• The defendant – a third party – procured or induced that failure
• The defendant knew about the judgment at the time they acted
• The defendant knew that what they were doing would cause the judgment to go unsatisfied

Note what is not on that list. You do not need to prove that the defendant and the debtor conspired together in any formal sense. You do not need insolvency proceedings. You do not need to trace specific assets into the defendant’s hands. You need to show that the defendant, knowing about the judgment, helped make it unenforceable. That is the wrong the law remedies.

One more thing worth noting: unlike the tort of inducing breach of contract, which recognises a limited justification defence, Bryan J confirmed in Lakatamia that no justification defence is available to a Marex tort defendant. The courts, understandably, are not interested in arguments that it was commercially reasonable to help a debtor hide assets from a judgment creditor.

Can Kenyan Courts Apply This?

This is the threshold question, and the answer is yes – under the framework that has governed Kenyan tort law since independence.

Section 3(1)(c) of the Judicature Act (Cap 8) directs Kenyan courts to exercise their jurisdiction in conformity with “the substance of the common law… in force in England on 12th August, 1897… so far only as the circumstances of Kenya and its inhabitants permit.” The effect of this provision is well-established: English common law is the default governing law for torts and contracts in Kenya, in the absence of local legislation. There is no Kenyan code of tort law. There is no local statute that addresses the specific scenario of third-party asset dissipation to defeat a judgment.

The objection most likely to be raised is the 1897 date. The Marex tort was recognised in 2020. Does the temporal limitation bar reception?

It does not. The 1897 date applies to English statutes of general application – not to the evolution of common law principles through case law. Kenyan courts have consistently applied English decisions from well after 1897 in tort, contract, and commercial disputes. The question as the East African Court of Appeal articulated in Obongo v Municipal Council of Kisumu,  is whether there is an established body of Kenyan law inconsistent with the rule, and whether there is anything in the circumstances of Kenya that makes applying it undesirable.

On the first question, there is no Kenyan law inconsistent with the Marex tort. Our existing economic torts, conspiracy, fraudulent misrepresentation, and inducing breach of contract, are its doctrinal cousins, not its rivals. On the second question: the commercial circumstances of Kenya, where judgment enforcement failures are endemic and asset dissipation is a known and pervasive strategy, make the Marex tort not merely desirable but urgently needed.

The constitutional argument reinforces this. Article 48 of the Constitution guarantees access to justice. Article 10 commits the state to the rule of law. A legal system that issues judgments and provides no mechanism against those who help debtors evade them reduces constitutional rights to theatre. Courts are entitled, I would say obligated, to develop the common law to give those rights substance.

The Kenyan Enforcement Gap in Practice

We have been doing SCC enforcement work long enough to know how this plays out. A decree is issued by the adjudicator. The debtor, often a small company or its director, simply does nothing. When the creditor comes to enforce, the assets have moved. Sometimes to a spouse. Sometimes to a related company. Sometimes just out of the jurisdiction entirely.

The remedies currently available are blunt instruments:

• Attachment of property works only if there are attachable assets in the debtor’s name. Often, there aren’t.
• Garnishee orders only reach accounts and debts the debtor hasn’t already emptied or redirected.
• Insolvency Act remedies require insolvency proceedings and apply primarily to the debtor’s own transactions, not independent acts of third parties.
• Contempt proceedings require a prior freezing order. If you didn’t get one in time, you have no contempt.
• Asset tracing is powerful but requires identifiable assets. Once they’ve been moved and mixed, this road closes quickly.

None of these reaches the person who made the enforcement failure possible. The director who transferred the company’s receivables to himself. The spouse who received a property transfer the day after judgment. The business partner who took control of the debtor’s only asset and put it in a new vehicle. They walk away. They are not defendants. They have committed no wrong that Kenyan law currently names.

Who Can You Sue?

The typical targets of a Marex tort claim in the Kenyan commercial context would include:

• Directors of debtor companies who strip corporate assets after notice of the claim or judgment
• Spouses or relatives who receive property transfers designed to put assets beyond reach
• Business partners or nominees who hold assets “on behalf of” the debtor and facilitate their concealment
• Banks or financial institutions, in extreme cases, that knowingly process transfers designed to defeat a judgment (though this would require strong evidence of actual knowledge)
• Trustees or company officers who assist a debtor in moving assets in breach of fiduciary obligations to creditors

The thread running through all of these is knowledge. The Marex tort does not hold every person who ever received money from a debtor. It holds the person who knew about the judgment, knew what they were doing, and did it anyway. That is a meaningful threshold, and it is also a threshold that the evidence in most egregious enforcement failures can meet.

How to Run One of These Claims

A Marex tort claim is a civil matter where you are suing a third party in damages. The SCC decree itself is the judgment for the purposes of the first element of the tort.

The pleadings need to be precise. You must particularise: the judgment and its terms; the manner of the debtor’s non-satisfaction; the specific acts of the defendant in procuring or inducing that failure; the evidence of the defendant’s knowledge of the judgment; and the value of the assets dissipated that would otherwise have been available. Courts will not infer knowledge — you need to prove it, ideally with direct evidence of notice.

Always run the Marex tort claim alongside a freezing order application over the defendant’s own assets. The tort claim is your substantive cause of action. The freezing order secures the defendant while the case is heard. Kenyan courts have long granted Mareva injunctions — drawing on English precedent — and that remains available here.

On quantum: damages are compensatory and measured by the value of assets dissipated that would otherwise have been available to satisfy the judgment, to the extent of the unsatisfied decree. In Lakatamia, the amounts were precisely calibrated to the value of each dissipated asset. You should be equally precise in your pleadings.

What This Means for Anyone Owed Money in Kenya

If you are a creditor, whether you have an SCC decree, a High Court judgment, or any other enforceable order, and you suspect that a third party helped your debtor defeat enforcement, you now have a name for what they did. You have a cause of action. You have a case.

The Marex tort is not a silver bullet. You still need to prove knowledge. You still need to conduct a proper assets investigation into the defendant before committing to proceedings. If the defendant is also asset-poor, a judgment against them solves nothing. International dissipation brings its own complications. A first-impression argument before a Kenyan court will require thorough doctrinal groundwork.

But for the category of case where a judgment has been frustrated by a knowing third party, which is, frankly, the majority of the genuinely difficult enforcement failures we encounter, this tort changes the landscape. It creates personal liability where previously there was none. It reaches people who have operated for years on the assumption that helping a debtor hide money carried no legal risk of its own.

What Practitioners Should Do Now

1. Investigate third parties from day one: When you file a claim or receive a decree, immediately identify who is connected to the debtor – directors, spouses, business partners, nominees – and document any asset movements you can trace. This is your evidence base for a future Marex claim.
2. Serve formally and document knowledge: Proof of knowledge of the judgment is a core element. Serve all proceedings and decrees formally and keep the proof of service. Copy correspondence to any known associates of the debtor. The evidentiary record you build now is the foundation of a Marex claim later.
3. Apply for a freezing order before enforcement fails: A Mareva injunction at the earliest opportunity before judgment – if you can establish a good arguable case – prevents the dissipation you would otherwise have to litigate. It also creates a contempt exposure for those who violate it, layering remedies.
4. Escalate to the Court when third-party dissipation is clear: Where standard enforcement mechanisms have failed, and the evidence points to third-party assistance, commence Marex tort proceedings in the Civil/Commercial Division. Lead with the common law reception argument, constitutional underpinning, and Lakatamia on the elements.
5. Prepare for a first-impression argument: No Kenyan court has formally adopted the Marex tort. The advocate who brings this case must be ready to argue the doctrinal foundation comprehensively — the Judicature Act reception clause, Obongo, the Lumley v Gye lineage, the Marex and Lakatamia decisions, and the constitutional provisions on access to justice. This is a case worth making. It is also a case that will set a precedent

A Final Word

There is something deeply corrosive about a legal system in which winning in court means nothing if the debtor has the right connections and enough warning. Every time a third party helps a debtor defeat a judgment and faces no consequence, two things happen: the creditor loses money they were owed, and the court’s authority is diminished. Multiplied across thousands of cases, this is not a technical enforcement problem. It is an access to justice crisis.

The Marex tort is the common law’s answer. It says, simply: if you knew, and you helped, you are liable. That is not a radical proposition. It is the minimum that a functioning legal order requires.

Kenyan courts have received English common law in far less obviously necessary circumstances than this. They can receive this. Practitioners who bring well-argued Marex tort claims in Kenyan courts will not be asking judges to invent something new. They will be asking them to apply a principle that has been sitting in our legal framework since 1897 – finally made explicit in 2020 – to a problem that Kenyan creditors have been living with for decades.

The judgment is only worthless if we allow the people who helped hide the money to keep walking away. We do not have to allow that anymore.