12-year legal war between traders and insurer over Sh50m claims

After their trucks were completely damaged by fire they lodged claims with the insurance company for compensation for the losses but the company denied liability and declined to compensate them. The company claimed the insurance policies covered only incidences that occurred in Kenya.

Ibrahim and Nurrow said at the time of taking out the insurance policies, they informed the company that they intended to transport goods outside Kenya and were requested to obtain goods on transit licenses from the Kenya Revenue Authority. Upon obtaining the transit license the company issued them with Common Market for Eastern and Southern Africa (Comesa) Yellow cards, to provide them with insurance cover while outside Kenya.

Ibrahim visited the insurance company on July 21, 2011, requesting for comprehensive cover based on Sh7.31 million (truck and tanker) and Sh3 million for the goods he would be carrying. He said he filled out a proposal form and paid Sh740,156 as a premium to the insurance firm. He paid Sh22,903 to the company for the Comesa Yellow Card that he said the company informed him covered for damage to a third party while the truck and tanker were in use across the Comesa region.

Nurrow, on his part, said he filled a proposal form stating the value of the truck and the tanker at Sh7.69 million. He said he paid Sh771,700 to the insurance company as a premium to cover the truck, tanker, and value of goods ferried thereon to the tune of Sh3 million.

The tribunal in its July 30, 2021 ordered the insurance company to pay Ibrahim Sh10.31 million and pay Nurrow Sh10.69 million. The award was to attract interest.

The insurance company moved to the High Court seeking an order to set aside the arbitral award. Justice Mumbua Matheka in a ruling dated October 12, 2022, dismissed the application. The judge, however, allowed an application by Ibrahim and Nurrow for recognition and enforcement of the award.

In January 2023, the company moved to court seeking orders to stop the execution of the decision issued by Justice Matheka. They also sought to lodge an appeal at the Court of Appeal against the ruling. Justice Hillary Chemitei upon reading the Notice of Motion application presented to the court on January 25 certified the matter as urgent. He also issued orders stopping the execution of the decision by Justice Matheka.

Ibrahim and Nurrow through lawyer Kipkoech Ng’etich then instructed Saddabri Auctioneers to help them recover the money and seized the insurance firm’s Sh25 million property in Eldoret over the claims.