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Court throws out case against regulator

By Wainaina Wambu | April 16th 2020

The Insurance Regulatory Authority (IRA) might be called as a witness in a Sh181 million claim dispute by Nakumatt Holdings against Kenindia Assurance.

Nakumatt, which is in liquidation, last year applied for an order for IRA to be included in the case as a defendant due to its wide-ranging role as the insurance industry regulator.

However, High Court Judge Mary Kasango on Tuesday dismissed the request, saying the regulator should instead be called as a witness in the case.

“IRA should be called as a witness and not be dragged into this case as a party. It is because of that finding and more particularly because neither parties have a claim against IRA that chamber summons dated August 7, 2019 is dismissed. The costs shall be in the cause,” ruled Ms Kasango.

Peter Kahi, the Nakumatt court-appointed administrator, had told the court that it was necessary to enjoin IRA “to these proceedings to resolve the common questions of law and fact”.

The case is part of a suit filed last year by Kenindia against Mr Kahi for an injunction to restrain him from commencing liquidation proceedings against them.

Kenindia also wanted the court to declare that it did not owe Nakumatt Sh181.3 million. 

The Nakumatt administrator had in his defence alleged that Kenindia had failed to settle claims where discharge vouchers had been executed and returned to them for settlement.

Creditors voted for liquidation of Nakumatt, which collapsed with an estimated debt of Sh38 billion, in January.

The process is still stuck in court. Former employees are also claiming Sh374 million in salary arrears.

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