The full story to date can be read at:
Kenya court orders return of $13 million in seized rosewood to suspected traffickers
Blundered Verdict by Kenyan Court Releases Mega Tonne Rosewood Seizure Back to Smugglers
Mombasa Court Orders KWS to Provide Permits for Illegal Rosewood Seizure
Kenya Wildlife Service vs. Shihua Industry Alliance
Conclusion: The UAE bound shipment was seized in Dar es Salaam sometime after December 13th. The exact date is not known but sailing time from Mombasa to Dar is less than 24 hours under normal circumstances.
While the Mombasa courts had ruled that the shipment was to be released, from an international perspective, it was illegal as soon as it set sail, vulnerable to seizure at the port of any of the 184 countries who were signees to CITES.
January 20th, 2023: This has been set as a mention date by Judge Naikuni and did not happen as he was on leave.
December 16th, 2022: The Appeal Court ruled in favour of KWS, allowing their application to stay issuance of a CITES permit pending the appeal.
December 13th, 2022: Container ship AS Nora, through Emirates Shipping Line, departed Mombasa Port with 22 x 40′ containers loaded with the 640 tonnes of illegal rosewood. The shipment was declared as over 4000 wooden logs being shipped by Shihua Industry agent, Salama Mbauro, with a destination of Jebel Ali Port, United Arab Emirates.
In Interlude: Maersk declined to ship the rosewood. Shihua/Egunza applied to the court ex-parte through another carrier and it was agreed.
September 19th, 2022: (virtual) This case was back in front of the Environment and Land Court of Mombasa and Justice L.L. Naikuni as a ‘mention’. For all intents and purposes, this was an update for the court as to the progress relating to the ordered transhipment.
George Egunza, advocate for Shihua, advised the court that KWS (the appellant) is continuing to stifle the transhipment process, alleging that they (KWS) emailed the MAERSK Shipping Line warning of embargoes should they ship contraband goods. Egunza further complained that as per Justice Naikuni’s comments some weeks previous, “there are forces that are trying to frustrate the process” and that “the circus is still on”.
Egunza further stated:
- Due to the appeal, the court becomes functus officio, as far as that issue is concerned and will await the ruling on December 16.
- In the meantime, the respondent, be at liberty to explore other available means of transhipping the consignment.
- Egunza to furnish all parties with the copies of email from KWS (as alleged) for parties to respond accordingly,
- The order of the Appeal Court stay to be placed before the court
- This matter will be mentioned again on January 20, 2023, unless otherwise stated
Egunza made it clear to the court, that there would be a further application to the court by his client prior to January 20th.
George Egunza is correct. The “circus is still on”.
September 7th, 2022: The Court of Appeal this morning heard the appeal of Kenya Wildlife Service regarding the May ruling of Justice L.L. Naikuni that KWS produce CITES permits for Hong Kong based Shihua Industry Alliance. The case is now Civil Application No. E050 of 2022.
The Court of Appeal has granted a stay, pending decision, on the order that KWS provide CITES permits to consignee Shihua Industry Alliance. The final decision on this matter will be made on December 16th, 2022. Legally, the 22 containers of Malagasy rosewood will remain in Mombasa until that time.
Kenya Revenue Authority and the Office of the Attorney General supported the appeal but did not file any submissions.
On August 24th, 2022, cross stuffing was completed moving the rosewood from Evergreen containers (it is reported that they refused to ship on hearing the contents) to Maersk containers. It is not clear whether Maersk had been informed on the true contents of the containers when they agreed to transport.
This case is back in Mombasa Land and Environment Court on September 19th.
July 29th, 2022: In a virtual proceeding, Justice Naikuni announced that his written ruling was 48 pages long and would be made available for all counsel no later than Monday. In a very brief synopsis, he dismissed the May 26th application of Coulson Harney LLP to represent Shihua – Yao Bao. Therefore, the status quo will be maintained and Shihua – Peter Liu will continue to be represented by George Egunza.
It is expected that the cross stuffing exercise of moving the rosewood from 22 Evergreen containers to 22 Maersk containers to commence on Monday, August 1st, and under the monitor of the deputy-registrar of Mombasa Law courts.
This process flies in the face of CITES directives, the latest being CoP19 Doc. 29.3, which in part states in 18.94, in a direction to source, transit and destination parties relating to Malagasy Dalbergia spp., who are urged to:
a) enforce all the measures that are recommended by the CITES Standing Committee concerning commercial trade in specimens of these species from Madagascar, including suspensions of such trade.
In the meantime, advocates of KWS have now lodged an appeal on the May 9th order of Justice Naikuni. This was an order compelling KWS to issue the required permits so as to release the rosewood for shipment.
It is not known at this time whether the advocates Coulson Harney LLP will appeal today’s ruling.
July 22nd, 2022: Today’s ruling did not take place due to a team building exercise being held by the Mombasa Court. No future date has yet been given. The import of this ruling is not to be discounted. Should the court rule in favour of Shihua – Yin Bao, it would theoretically nullify all court proceedings to date going back to 2017.
June 24th, 2022: The site visit to the port where the containers were stacked did take place. Three of the 22 containers were opened and rosewood logs were observed inside. The intention was also for the court to observe the beginning of a cross stuffing procedure. Shihua-Liu had requested that the contents of the containers be moved from the Evergreen containers to Maersk containers but KRA is refusing. KRA has objected and this now needs to be adjudicated. A ruling on this may have occurred on July 5th.
The appeal by KWS is still being worked on, to be filed imminently. The appeal, in theory, could stay proceedings for a 2-3 year period, the average length of appeal decisions being rendered.
June 13th, 2022: The hearing today was essentially between the advocates of Yao Bao, the sole director of Shihua Industry Alliance, and the advocate of Peter Liu who states he also represents Shihua Industry Alliance and is the owner of the 640 tonnes of rosewood.
Shihua/Yao Bao, represented by Coulson Harney LLP, is applying to the Court to replace George Egunza and Associates, representing Shihua/Liu.
While the affidavits of Yao Bao and submissions of Peter Liu (through Egunza) have not been read, the substantive issues could be gathered through the arguments presented today in court.
The position of Shihua/Yao Bao is that Yao Bao is the sole director of Shihua Industry Alliance (Hong Kong) and has been since 2014 to present. Yao Bao states that he did indeed buy the rosewood that is the subject of the court proceedings. Peter Liu, who has no association with Shihua Industry Alliance, was involved only in the trans-shipment process.
Yao Bao states that after the rosewood was seized by KWS in Mombasa, he attempted to ascertain what happened to the consignment without success. He did not find out about these proceedings until he read about it in the media this past February 2022. He believes that Peter Liu has attempted to steal the rosewood from him through fraud and orchestration of the court and export process.
Shihua/Liu’s position is that Liu has been involved with this consignment since 2014 and specifically with this civil suit that began in 2017. Shihua/Liu’s credentials have held up to the scrutiny of the police and Kenya Forestry Service and that Liu, through agent Salma Mbauro, have paid all fees associated to this consignment since 2014.
Shihua/Liu attacked the legality of Shihua/Bao’s application for new counsel, questioning whether indeed the present court had jurisdiction at this point to rule on the application. They also questioned the legality and appropriateness of submitted affidavits (some documents were still in the Chinese language). It was their position that the time for questioning whether imposters and fraud were part of this process, had passed, that Yao Bao had shown no proof of his due diligence in attempting to locate ‘his’ shipment, and that this application by Shihua/Yao Bao was a side show to be dismissed with costs paid by Bao.
Advocates representing KWS, the Attorney General and Kenya Revenue Service were also present. There was a consensus that the issues were substantive with a suggestion of further investigation. It was also suggested that there was a need to stay the issuance of CITES export documents for the time being until it was determined who exactly was the true owner. Shihua/Liu was vehement and inflammatory in its denial of this proposal stating that a court order of May 9th had nothing to do with the application presently before the court.
Justice Naikuni stated that he will rule on the application on July 22nd, 2022. The site visit to the port for the purposes of verifying the contents of the containers is scheduled for June 24th.
The appeal by KWS on the court order of May 9th is still pending.
SEEJ-AFRICA: In a nutshell, 640 tonnes of rosewood, seized in Mombasa in 2014, was erroneously declared an illegal seizure by a Mombasa court in 2019, is now being contested in the same court by two different Chinese smuggling entities.
June 8th, 2022: (virtual) June 8th had been set as the date for arguments from the two different advocates who state they both represent the consignee, Shihua Industry Alliance of Hong Kong.
As a re-cap, George Egunza and Associates have been representing Shihua Industry Alliance since at least 2017, believed to be the counsel on record with the filing of Miscellaneous Applications 328/2017 in Chief Magistrates court in Mombasa (civil registry).
As per details of May 27th, the sole director of Shihua Industry Alliance, Mr. Yao Bao, and through advocates for Coulson Harney LLP, state that he has never engaged George Egunza to represent him in any matter. He wishes the court to dis-engage George Egunza from this matter.
Unsurprisingly, an adjournment was requested by Egunza and Associates. He had not filed his response to Coulson Harney as he had not had a reply from his principal in China. He also had a sickness in his family and so was also requesting the adjournment on compassionate grounds.
Advocates for Coulson Harvey objected as they were ready to proceed and had flown to Mombasa from Nairobi. The court permitted the adjournment and the hearing is scheduled virtually for June 13th.
The site visit, that had previously been re-scheduled for June 17th, is now scheduled for June 24th as the court is not sitting on the 17th.
There has not yet been a response to the Appeal lodged by KWS.
May 27th, 2022:
The court had scheduled a site visit for this date to confirm the contents of at least some of the containers prior to cross stuffing (again).
This objective was jeopardised by an application filed in the court late the day previous (May 26th) by the law firm of Coulson Harney LLP, advertised as one of the largest and best-known corporate law firms in Kenya, with offices located internationally. Coulson Harney served the court a notice that they were applying to now represent Shihua Industry Alliance Company Limited (Shihua) and to replace the firm of Egunza and Associates.
This was mentioned again in open court on Friday morning (27th). It was stated at this time by a representative of Coulson Harney that the Notice of Change of Advocates included a letter with affidavit from the apparent sole director of Shihua, a Mr. Yao Bao, who stated that he “had never authorised M/s Egunza and Associates to appear in these proceedings on its behalf’. The affidavit also stated that “the said engagement of M/s Egunza and Associates might involve forged documentation.”
Mr. Egunza contested the application and presented Salma Mbauro before the court with documentation that she had power of attorney for Shihua since early in proceedings.
Justice Naikuni ruled that Coulson Harney had 3 days to file to the court complete documentation required for his application. He set June 8th as to the date that he would hear arguments from both sides and June 13th for his decision on the matter.
Justice Naikuni also decided that the site visit would continue for that afternoon at 3pm.
At approximately 4pm, the court entourage (Justice, Court assistant, advocates, KWS legal officer) arrived at the location within the port where the seized containers were situated.
After a wait of approximately 20 minutes, it was announced to the ‘court’, that the Kenya Revenue Authority (KRA) would not be attending to open the containers. It was not known why they were not in attendance. KRA had been served notice to attend through email on September 20th and personally on September 24th.
The Justice stated that this is the second time this has happened to the court and the court should not be seen as being ineffective. He openly speculated that “someone is working against us, a very powerful person”, and questioned as to whether the court should now have the rosewood burned, similar to ivory in the past.
The court set a date of May 30th to address the situation of the failed container site visits.
May 20th, 2022: A court site visit to Mombasa port was scheduled for the purpose of the court confirming that at least some of the subject containers contained rosewood as described. The site was adjourned to Friday May 27th. The consignee had also requested that the rosewood be moved from existing containers to other empty containers. This process, known as cross-stuffing would be initiated at this time.
KWS has filed an appeal relating to the order of the court made on May 9th relating to KWS issuing export documentation to the consignee, Shihua Industry Alliance. Such documentation would be in contravention of CITES regulations relating to the transhipment of Malagasy rosewood, and this consignment in particular.
May 11th, 2022: Attached below are the verbatim orders of Justice L.L. Naikuni of the Mombasa Environment and Land Court, issued on May 9th, 2022 in relation to a May 2014 seizure of 640 (or 642) tonnes of Malagasy rosewood by the Kenya Wildlife Service.
- The notice of motion of January 27th (by the first respondent being Shihua Industry Alliance) is hereby allowed and is meritorious with costs
- The applicant, Kenya Wildlife Service, is hereby authorized to ensure the issuance of such permits or related export clearance documents or certificates or diplomatic authorization of some sort from such authorized statutory body to the satisfaction of CITES for the purposes of the transmission of the consignment that has been in this country for too long, belonging to the first respondent, and that should be done in the next 3 days from today.
- There be a site visit on May 20th, 2022 at the KPA Kilindini Harbour of the 37 containers of the consignment to be organized and led by the following multi agencies, being KWS, KRA, KPA and Kenya Police at the Kilindini police station.
- That an order is hereby granted in tandem with the other directions issued hereby for the verification of the contents of the said 37 containers by this court during the cross stuffing of fresh containers at a designated area reserved for the same and due process including but not limited to the supervision and release of the same to be done in the presence of this court through the Judge or Deputy Registrar for purposes of transmission to the designated place.
- The applicant, KWS, to bear the cost of this notice of motion application.
- Failure to comply with or breach of any of my orders or directions I have given here today automatically to cause the Director Kenya Wildlife Services, in person, to be committed to civil jail for a reasonable period for being in contempt for a period that this court will determine. Those are my orders.
After some discussion between advocates and the Honourable Justice Naikuni some clarifications were made:
- it is noted that the goods are out of the hands of the state.
- what KWS needs to do is to provide advice and pre-requiste documents for the smooth transhipment of 37 containers to a country at the designation of the first respondent (Shihua)
- KWS has the main responsibility to do so having illegally impounded these containers, and I don’t want to belabour the point, as there exists a judgement of this honourable court and I am not opening up that judgement to that effect. I have also taken cognizance that this is the 7th year that these containers are being kept in this country where the respondent is incurring unnecessary expenses in respect of demurrage.”
“I direct as follows:
- The Applicant is granted an extension of 5 days to inform and advise its client, KWS, accordingly on the provision of the permits and whatever authorization documents as need to be done.
- The Applicant is granted leave to file a formal application to file an appeal if they so wish.
- The Applicant is entitled to certified typed copies of the proceedings.
- Accordingly, this matter will be mentioned on the 20th of May at the site, as we check the cross stuffing. Thereafter the Deputy Registrar will be representing me in the other processes.”
It is noted that the Justice makes reference to 37 containers. The initial consignment was shipped in 34 containers. The contained rosewood was later cross stuffed into 40’ containers; some documents indicating 22 containers and others indicating 25 containers.
The decision of the Mombasa Environment and Land Court flies in the face of CITES, who has stated since at least 2016 that the rosewood seized by KWS was illegal and should not be transhipped under any circumstances.
The Kenya Wildlife Service, the representative of CITES in Kenya, is now caught in the middle. Do they follow the orders of the Kenyan court who erroneously deemed the rosewood seizure as illegal or do they follow the CITES guidelines and withhold the required export documents?