Court revives Kenya Power's case against insurance firm

The Court of Appeal has revived Kenya Power’s Sh55 million claim against a local insurer.

A three judge bench composed of Justices Wanjiru Karanja, GBM Kariuki and Hannah Okwengu overturned a decision by the High Court that had thrown out the case against American Life Insurance thus giving the electricity provider a glimmer of hope over the cancelled accident insurance claims.

“We have examined the relevant parts of the appellant’s (KP) claim and find nothing that can be said to be inadmissible, or evidence of lack of seriousness. It is apparent the appellant had a justifiable cause of action arising from claims made under the contract,” the judges ruled.

The ruling by Appellate Court judges further read: “... indeed, discussions concerning the claims had been ongoing. It cannot, therefore, be said that the appellant’s suit was intended to annoy. Nor was the appellant’s claim frivolous, vexatious or an abuse of the court process.”

The case filed in 2004 was dismissed after the insurer filed grounds of opposition claiming that the case filed by the power company was an abuse of the Court process as insurance claim was barred by contractual limitation. The company argued that Kenya Power would not have been compensated for failing to file the claim within the period provided under the contract.

However, the three judges ruled that the lower court Judge who presided over the case had failed to appreciate there was a contract between the two firms before he made the ruling.

“The learned Judge appears to have misapprehended the facts. From the pleadings, the application dated June 23, 2004, and the affidavit filed in support and in response thereto, it was common ground that there was a contract of insurance between the appellant and the respondent pursuant to which the appellant lodged some claims with the respondent,” Justices Karanja, Okwengu and Kariuki ruled.

Appellate Court

The Appellate Court judges further ordered that the two companies file their affidavits on the case within 30 days.

“In its plaint the appellant claimed that the respondent wrongfully repudiated claims lodged by the appellant under the policy of insurance. The learned Judge prematurely determined the issue without giving the appellant the opportunity to challenge the defence raised by the respondent .

We come to the conclusion that the learned Judge failed to exercise the required caution and erred in striking out the appellant’s plaint. His ruling cannot be upheld,” the court ruled.