https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/9283

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **COMMERCIAL AND TAX DIVISION** **HCCOMM NO. 311 OF 2012** **COMPLY INDUSTRIES LIMITED………………………….PLAINTIFF** **VERSUS** **P.N. MASHRU LIMITED…………………………………..DEFENDANT** **JUDGMENT** 1. By a Plaint dated 14th May 2012, the Plaintiff, Comply Industries Limited, instituted this suit seeking special damages in the sum of Kshs. 35,833,823.00 together with interest, costs of the suit and any such further relief as this Court may deem just. 2. The Plaintiff’s claim arises from the importation of a new thermal oil heater from Spain at a cost of approximately Kshs. 46,000,000.00. The equipment was insured under a marine cargo policy with Kenindia Assurance Company Limited. The Plaintiff contends that it contracted the Defendant, a transport and logistics company, to convey the equipment by road from the Port of Mombasa to its premises in Nakuru. 3. It is not in dispute that on or about the 12th day of May 2006, while the said thermal oil heater was in the custody of the Defendant at its yard in Jomvu, Mombasa, the equipment slipped from a crane during the loading process and fell to the ground. The Plaintiff contends that the fall caused substantial damage to the equipment, which in turn rendered it incapable of attaining its designed operational temperature of 250 degrees Celsius, instead only reaching between 150 and 180 degrees Celsius. The Plaintiff further avers that it was indemnified by its insurer, Kenindia Assurance Company Limited, in the sum of Kshs. 34,768,350.00, and that the insurer is subrogated to all rights and remedies of the Plaintiff against the Defendant. 4. The Defendant filed a Statement of Defence dated 28th June 2012 denying liability. It contended, inter alia, that the Plaintiff had failed to inspect the equipment at the port and could not exclude the possibility of latent or patent defects pre-dating the transport; that any fall was caused or contributed to by the Plaintiff or its agents; and that the alleged failure in performance of the heater resulted from inherent defects unrelated to the fall. **The evidence** 1. At the hearing, the Plaintiff called two witnesses. Pw1 - Nilesh Mehta, a director of the Plaintiff, adopted his witness statement dated 14th May 2012 as his evidence in chief. His evidence was that the thermal oil heater was imported brand-new from Sugimat, Spain, and that after the fall at the Defendant’s yard, the delivery notes from the Defendant indicated that the plant was damaged. Following assembly at Nakuru, the heater failed to perform optimally, reaching only 160 degrees Celsius. On cross-examination, he confirmed that the fall occurred on 12th May 2006, that the top part of the heater was damaged, and that a local repair proposal by Cunningham Lindsay was rejected as the manufacturer considered it risky due to the high operating temperatures. 2. Pw2 - John Miners, a loss adjuster acting on behalf of Cunningham Lindsay (K) Limited, testified that he prepared preliminary, interim and final reports regarding the loss. He confirmed that the equipment fell while in the Defendant's custody and that the damage materially affected its heating capacity. Although he acknowledged that a local repair option had been proposed, he testified that the manufacturer expressed reservations due to the risks involved. 3. The Defendant also called two witnesses. Dw1 - Francis Mulili, the Defendant's administrative manager, adopted his written statement dated 17th January 2024 during his examination in chief. He told the court that he recalled the accident on 12th May 2006 at their Jomvu yard, as he was present and witnessed it. He further testified that the equipment slipped while being loaded onto a truck by a crane, fell, and was damaged. 4. In cross-examination, he told the court that the equipment was delivered to the Plaintiff at the Plaintiff's premises in Nakuru on 20th May 20006. He told the court that the date 22nd May 2006 referred to a different consignment. He testified that the Defendant received instructions from the Plaintiff to proceed to the port, load and deliver the cargo. And that he had no evidence to show that he informed the Plaintiff of the incident when it occurred. 5. He told the court that the equipment should have been under 40 tonnes. He testified that he is not a Technical person, but to him the damage was only a small dent on the outer part, but couldn’t confirm on the technical part of the report. 6. Dw2 - Joel Cheruiyot Rono, a loss adjudicator, adopted his statement. He participated in investigations and confirmed the fall and the consequent damage to pressure pipes, heater coils and related components. He stated that post-accident the equipment could only attain about 180 degrees Celsius instead of the designed 250 degrees Celsius. 7. After the close of the hearing, parties filed written submissions, which I have considered. **Analysis and determination** 1. I have considered the pleadings, evidence and submissions on record. The issue for determination is whether the Plaintiff is entitled to the relief sought. 2. The Plaintiff brought this suit on behalf of its insurer, Kenindia Assurance Company Limited, invoking the doctrine of subrogation. The legal character and boundaries of that doctrine are well settled in **Africa Merchant Assurance Company v Kenya Power & Lighting Company Limited (2018) eKLR** the court of Appeal stated. ***“The essence of the doctrine of subrogation is not in contention. It allows an insurer after compensating an insured for any loss under the insurance contract to step into the shoes of the insured. In that, the insurer is entitled to all the rights and remedies the insured might have against a third party in respect of the loss compensated. As it stands, the law in that respect is settled, that is, that an insurer cannot under the doctrine of subrogation institute a suit in its own name against a third party.”*** 1. For the doctrine of subrogation to be invoked, certain conditions precedent must be met. First, there must be a contract of insurance in existence, the risk must have crystallized, and actual payments must have been made to indemnify the insured. The loss must also have been occasioned by a third party against whom the insured had a cause of action. The Plaintiff pleaded these elements, and Pw1 testified that the insurer paid Kshs. 34,768,350.00. However, I must caution that proof of payment by an insurer does not, without more, establish the liability of the third party. The Plaintiff must independently prove the Defendant’s liability in respect of the loss. 2. In this case, the equipment was new, imported from Spain, and recently cleared from the Port of Mombasa. Both Dw1 and Dw2 confirmed it fell from a crane while solely under the Defendant’s custody and control. The Defendant does not deny that damage occurred. Under these circumstances, the doctrine of *res ipsa loquitur* is appropriately applied. A heavy thermal oil heater typically does not slip from a crane and fall if proper precautions are followed. The fall itself provides enough initial evidence of negligence by the Defendant. The Defendant offered no evidence to challenge this presumption. Its claim that unqualified staff hired by the Plaintiff caused the fall was unsupported. Therefore, I find that the Defendant was negligent in handling the Plaintiff’s equipment and is likely responsible for any resulting loss due to that negligence. 3. Notwithstanding the finding of negligence, the Plaintiff must go further and prove, on a balance of probabilities, that the specific loss it claims, irreparable damage to the internal functioning of the heater resulting in its inability to reach 250 degrees Celsius, was caused by the fall. 4. In this case, the evidence adduced is, regrettably, insufficient to discharge that burden. Pw1, a businessman, candidly admitted he was not a technical expert. Pw2, a loss adjuster, gave a professional opinion on the quantum of loss, but his reports were largely based on observations and communications with the manufacturer. No independent engineering or metallurgical expert was called to explain how the external impact caused the coils, pressure pipes, and other internal components to fail in such a way that the maximum temperature dropped by approximately 70 to 100 degrees Celsius. Significantly, no representative from Sugimat, the Spanish manufacturer, attended court. The manufacturer’s reservations about local repair, while noted, were presented as a risk assessment, not as conclusive proof that the heater was beyond economic repair or that replacement was the only option. 5. The Defendant pleaded latent defects. Although the Defendant did not prove that plea, the legal burden of negligence remains with the Plaintiff to prove its case. 6. **Sections 107 and 109** of the **Evidence Act** provide: 7. ***(1) Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist.*** 8. ***The burden of proof as to any particular fact lies on the person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.*** 9. The plaintiff needed to prove the assertion that the fall occasioned the heater’s operational failure. In the absence of technical evidence linking the physical damage to the internal thermal inefficiency, the Court is left to speculate. 10. The Plaintiff claimed Kshs. 35,833,823.00. It is trite law that special damages must not only be pleaded but must be specifically pleaded. (See **Hahn v Singh (1985) KLR 716**). The amount was proved by documents showing indemnification by the insurance. I find that indemnification by the insurance does not relieve the court of its duty to assess whether the Defendant is legally liable for that amount. Without proof of causation, the claim for special damages must collapse. 11. In the circumstances, I find that the Plaintiff failed to prove on a balance of probabilities that the fall was the proximate cause of the subsequent failure of the heater to attain the required temperature of 250 degrees Celsius and the consequential loss claimed. 12. Accordingly, the Plaintiff’s claim against the Defendant vide the Plaint dated 14th May 2012 is hereby dismissed. The Defendant shall have the costs of the suit. It is so ordered. **JUDGMENT** delivered virtually, dated and signed at **NAIROBI** This **25th** day of **June** 2026. **PETER MULWA** **JUDGE** **In the presence of:** *Mr. Ajak Jok* for Plaintiff *Ms. Akong’a* for Defendant Court Assistant*: Lispa*