Court dismisses insurance firm's appeal over Sh50 million claim

The Court of Appeal has dismissed Monarch Insurance’s bid to stop a Sh50 million compensation claim by two Nakuru businessmen.

Monarch Insurance Company Limited has been entangled in a legal battle for over a decade with Hassan Ibrahim and Abdirahman Issak following a claim for compensation after their fuel tankers were destroyed in a fire in Juba, South Sudan.

The businessmen were awarded compensation by a tribunal appointed by the High Court, but the insurer failed to honour the award.

Monarch appealed a High Court decision that upheld the arbitration award in favour of the businessmen.

The insurer claimed the trial court had failed to consider specific terms within the insurance policies and argued that the COMESA Yellow Card issued did not extend to South Sudan. Monarch further contended that the tribunal lacked jurisdiction.

However, three Court of Appeal judges — Mohamed Warsame, John Mativo, and Paul Gachoka — ruled that the appeal was incompetent.

“It is imperative to note that the appellant neither applied nor sought leave to appeal against the decision of the High Court. This was a grave omission on the part of the appellant and is not a technicality since it goes to the root of jurisdiction,” the court ruled.

Ibrahim and Issak had approached Monarch in August 2011 for comprehensive insurance cover for their tankers, which were used to transport petroleum products.

The businessmen allegedly informed the insurance company of their intention to transport fuel to South Sudan. In response, Monarch advised them to obtain a goods-in-transit licence from the Kenya Revenue Authority, which they did.

Monarch then issued the businessmen with a COMESA Yellow Card covering the journey outside Kenya.

Unfortunately, while the tankers were parked at the customs department yard in Juba during the transportation process, a fire broke out and destroyed them.

The pair lodged a compensation claim with Monarch for the loss of their trucks and the fuel, but the company declined liability, stating that the insurance policies only covered incidents within Kenya.

On October 5, 2012, the businessmen sued Monarch Insurance before the Nakuru High Court, claiming that the insurer had breached the terms of the insurance policy.

Ibrahim claimed to have requested comprehensive cover amounting to Sh7.3 million for the tanker, Sh3 million for the goods being transported, paid a premium of Sh740,156, and an additional Sh22,903 for the COMESA Yellow Card.

Issak, on his part, claimed to have paid Sh7.6 million for his truck and tanker, Sh771,700 for the premium cover, and Sh3 million for the goods.

The case was referred to arbitration upon Monarch’s request, and the tribunal subsequently awarded the duo Sh50.4 million in total.

In 2021, the tribunal ordered Monarch to pay Sh10.3 million to Ibrahim and Sh10.6 million to Issak, along with the arbitrators’ costs.

Aggrieved by the decision, Monarch appealed to the High Court, which upheld the tribunal’s ruling. The insurer then lodged a further appeal before the Court of Appeal.

The three judges, however, found the appeal to be fatally defective.

“We come to the inescapable conclusion that the appeal is incompetent. No leave to appeal was sought. This is not a technicality that can be cured by the provisions of the Constitution or the ‘oxygen’ principles,” the judges observed.