https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7459

Muringi v Trident Insurance Company Ltd & another (Civil Appeal E100 of 2026) [2026] KEHC 7459 (KLR) (Civ) (28 May 2026) (Judgment) Neutral citation: [2026] KEHC 7459 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Law Courts) Civil Civil Appeal E100 of 2026 WA Okwany, J May 28, 2026 Between Derick Wachira Muringi Appellant and Trident Insurance Company Limited 1st Respondent Skymark Insurance Agency Limited 2nd Respondent Judgment Background 1.The Appellant obtained a comprehensive insurance policy through the 2nd Respondent in respect of motor vehicle registration number KDM 814B, which he used as a Public Service Vehicle for ride-hailing services. 2.On or about 25th May 2024, the vehicle stalled in flood waters in Parklands, Nairobi during heavy rains. The vehicle was subsequently towed to a garage allegedly approved and designated by the Respondents for repairs. 3.The Appellant’s contention before the trial court was that the Respondents assumed custody and control of the vehicle but delayed in repair and release of the vehicle thereby occasioning him additional damage that occurred while the vehicle was under the garage’s custody. It was the Appellant’s case that the Respondents only authorized partial repairs amounting to 50% of the assessed repair costs and that the prolonged detention of the vehicle occasioned loss of user and mental anguish. 4.The Respondents filed a joint response denying liability for the Claimant’s claim but admitted the existence of an insurance policy issued by the 1st Respondent through the 2nd Respondent. The Respondents maintained that any obligation to indemnify the Claimant was strictly governed by the terms, conditions and exclusion clauses contained in the insurance contract. 5.The Respondents however denied all allegations contained in the Statement of Claim and contended that the Claimant’s entitlement under the insurance policy was subject to the express policy terms. They added that the damage to the vehicle resulted from human error and negligence as the Appellant’s agents attempted to restart the engine after the vehicle had been submerged in water which conduct amounted to negligence excluded under the policy. 6.The Respondents further stated that investigations and assessment established that repairs to the engine and gearbox assembly would only partially be covered and that under the policy terms, the Appellant was liable to contribute 50% of the assembly costs due to contributory negligence. 7.According to the Respondents, the partial approval of repairs was communicated to the Appellant through the 2nd Respondent. 8.The Respondents further denied the additional damage and custody allegations including loss of user and consequential losses. 9.The Respondents additionally raised a jurisdictional objection, contending that although the Small Claims Court had jurisdiction over claims within the statutory monetary threshold, disputes concerning interpretation and enforcement of insurance policy terms and conditions properly fell within the jurisdiction of insurance regulatory mechanisms and not the Small Claims Court. 10.The Small Claims Court heard the case and found that there existed a valid insurance policy, that the damage to the vehicle arose from an act of God, that the Claimant proved entitlement to compensation under the policy in the sum of Kshs. 267,960 and that special damages in the sum of Kshs. 8,560 had been specifically pleaded and proved. 11.The trial court, however, declined to award damages for loss of user and general damages for mental anguish, holding that such claims either fell outside the policy terms or outside the jurisdiction of the Small Claims Court. 12.The trial court consequently entered judgment for Kshs. 267,960 as compensation under the policy, Kshs. 8,560 for special damages, costs and interest. The Appeal 13.Aggrieved by the trial court’s decision, the Appellant filed the present appeal and listed several grounds of appeal in the memorandum of appeal, namely;a.That the trial court erred in dismissing the claim for compensation for loss of user;b.That the trial court relied on an allegedly discredited and inconsistent policy document;c.That the trial court failed to appreciate that the Respondents were responsible for delay and consequential damage while the vehicle remained in their custody;d.That the trial court improperly treated the 2nd Respondent as having participated despite allegedly not entering appearance;e.That the trial court failed to appreciate that the vehicle remained in the Respondents’ custody from May 2024 until judgment;f.That the trial court failed to award general damages for mental anguish and delay tactics. 14.The appeal was canvassed by way of written submissions which I have considered. I however note that the Respondents had not filed any submissions as at the time of writing this judgment. Appellant’s Submissions 15.The Appellant submitted that the subject motor vehicle was a profit-making commercial vehicle used for income generation through ride-hailing services and that loss of user was therefore foreseeable and recoverable. 16.The Appellant relied on several cases including the case of CIC General Insurance Limited v Mutitu [2024] KEHC 1435 (KLR) for the proposition that damages for loss of user of a profit-making chattel are recoverable and intended to place the claimant in the position he would have been if the breach had not occurred. 17.The Appellant contended that the Respondents were aware that the vehicle was being used commercially as shown in the bank and M-Pesa statements which demonstrated average earnings of Kshs. 4,000 per day. 18.The Appellant stated that tracking evidence showed multiple engine ignitions while the vehicle remained under the Respondents’ custody and that further inspection revealed additional missing parts and deterioration while the vehicle was detained. 19.The Appellant further challenged the insurance policy document relied upon by the trial court, arguing that it contained inconsistent fonts and pagination, lacked referenced clauses and materially differed from the authenticated insurance certificate produced by the Appellant. 20.The Appellant invoked the doctrine of contra proferentem and relied on the decision in S.M. Thiga t/a Newspaper Services v Phoenix E.A. Assurance Co. Ltd [2016] KEHC 8135 (KLR) for the proposition that ambiguities in insurance contracts are construed against the insurer. 21.On general damages, the Appellant submitted that the Respondents acted in bad faith and that the prolonged detention of the vehicle caused him mental anguish and financial hardship. He emphasized that the subject motor vehicle had been acquired through a loan facility that continued accruing interest while the vehicle remained unusable. 22.The Appellant additionally argued that the Small Claims Court had jurisdiction to entertain claims of this nature under Section 12(1)(d) of the Small Claims Court Act. Reliance was placed on the decision in Akinyi v Mshila [2025] KEHC 2659, Gichovi v Kilem [2024] KEHC 10859 and Irungu v Karanja [2024] KEHC 8162. Issues for Determination 23.Having considered the record of appeal, the judgment of the trial court and the submissions by the Appellant, I find that the following issues arise for determination:a.Whether the trial court erred in declining the claim for loss of user;b.Whether the trial court erred in relying on the impugned insurance policy document;c.Whether the Respondents were liable for delay and consequential damage while the vehicle remained under their custody;d.Whether the Appellant was entitled to general damages for mental anguish and bad faith;e.Whether the Small Claims Court had jurisdiction to entertain the impugned claims; Analysis and Determination 24.On loss of user, the evidence on record demonstrates that the subject vehicle was being used commercially for ride-hailing services. 25.The Appellant produced bank statements, M-Pesa statements and evidence relating to the vehicle’s commercial operations. 26.The trial court acknowledged the existence of a valid insurance contract but declined the claim for loss of user on grounds that such relief was not expressly covered under the policy. 27.This Court notes that damages for loss of user are recoverable where a claimant demonstrates loss arising from deprivation of a profit-making chattel. In Samuel Kariuki Nyangoti v Johaan Distelberger [2017] eKLR, the Court of Appeal recognized that damages for loss of user may be awarded alongside compensation for the value of a damaged vehicle. 28.Similarly, in CIC General Insurance Limited v Mutitu [2024] KEHC 1435 (KLR), the High Court reiterated that the purpose of damages is restitutio in integrum restoring a claimant to the position he would have occupied absent the breach. 29.The record further shows that the Respondents retained custody of the vehicle for an extended duration. The Appellant also produced evidence suggesting further deterioration and interference with vehicle parts while the vehicle remained under the Respondents’ control. 30.My finding is that the trial court adopted an unduly restrictive interpretation of the policy and failed to adequately consider the consequential commercial loss proved by the Appellant. 31.I find that the Appellant sufficiently demonstrated entitlement to reasonable compensation for loss of user. I however take the view that although the Appellant proved that the subject motor vehicle was a commercial income-generating asset, the claim for loss of user cannot be awarded for the entire period claimed without regard to the duty to mitigate loss and the pecuniary jurisdiction of the trial court. 32.It is trite law that a claimant is under a duty to take reasonable steps to mitigate loss arising from breach or damage. An award for loss of user must therefore remain reasonable, proportionate and consistent with the circumstances of the case. 33.In African Highland Produce Limited v John Kisorio [2001] eKLR, the Court of Appeal held that a claimant who suffers loss is under a duty to take reasonable steps to mitigate the loss and cannot recover damages which could have been avoided by taking such reasonable action. 34.In British Westinghouse Electric and Manufacturing Co. Ltd v Underground Electric Railways Co. of London Ltd [1912] AC 673, the House of Lords stated the general principle that a claimant “cannot recover damages for any loss which he could reasonably have avoided,” thereby establishing the duty to mitigate loss. 35.The principle was also reaffirmed in Capital Fish Kenya Limited v Kenya Power & Lighting Company Limited [2007] eKLR where the Court observed that damages recoverable are only those reasonably flowing from the breach and which the claimant could not reasonably mitigate. 36.In the instant case, while the evidence demonstrates that the vehicle remained under the Respondents’ control for a prolonged period, an award covering the entire period from 25th May 2024 to 23rd September 2025 at Kshs. 4,000 per day would exceed Kshs. 1 million and thereby outstrip the pecuniary jurisdiction of the Small Claims Court established under Section 12 of the Small Claims Court Act. 37.This Court is therefore persuaded that a global and reasonable award for loss of user is appropriate in the circumstances. 38.Consequently, I set aside the trial court’s finding declining damages for loss of user and substitute it with an award of Kshs. 300,000/= for loss of user. 39.The Appellant also challenged the authenticity and coherence of the policy document relied upon by the Respondents and faulted the trial court for relying on the impugned policy document. 40.The record reveals concerns regarding inconsistent pagination, missing referenced clauses and discrepancies between the impugned policy and the insurance certificate. Under the doctrine of contra proferentem, ambiguities in insurance contracts are construed against the insurer. In S.M. Thiga t/a Newspaper Services v Phoenix E.A. Assurance Co. Ltd [2016] KEHC 8135 (KLR), it was held that exclusion clauses must be clear, express and unambiguous. 41.This Court finds merit in the Appellant’s complaint that the trial court failed to sufficiently interrogate the inconsistencies in the policy document before relying on it to reject portions of the claim. 42.Turning to the issue of damages for delay and consequential damage, the evidence before the trial court demonstrated that the Respondents authorized towing of the vehicle which remained within premises that they had approved. The Appellant alleged additional damage while the vehicle remained in custody. 43.The Respondents did not rebut the evidence concerning the prolonged detention of the vehicle and allegations of missing or altered parts. 44.I find that once the Respondents assumed control over the repair process and custody arrangements, a duty arose to ensure reasonable care and timely processing of the claim. I further find that the prolonged retention of the vehicle without satisfactory resolution exposed the Appellant to foreseeable commercial loss. 45.On whether Appellant was entitled to general damages for mental anguish, it is trite that ordinarily, general damages are not recoverable for breach of contract unless exceptional circumstances exist. The Court of Appeal has consistently maintained that damages for breach of contract are intended to compensate proven loss and not to punish the defaulting party. (See Sundowner Lodge Limited v Kenya Tourist Development Corporation [2023] KECA and Securicor Courier (K) Ltd v Benson David Onyango & Another [2008] eKLR). Courts have however recognized that damages may be awarded where breach is accompanied by bad faith, oppressive conduct or conduct causing distress beyond ordinary commercial inconvenience. In Capital Fish Kenya Limited v Kenya Power & Lighting Co. Ltd [2016] eKLR the Court of Appeal recognized an exception where the conduct of the defaulting party is oppressive, high-handed, outrageous, insolent or vindictive, in which event an award of general damages may be justified. 46.In the instant case, the record reveals prolonged detention of the vehicle, delayed resolution of the insurance claim, continued accrual of loan obligations and allegations of bad faith and unreasonable conduct. 47.While the Small Claims Court questioned jurisdiction regarding such damages, Section 12(1)(d) of the Small Claims Court Act grants jurisdiction over compensation claims arising from contracts and related disputes. 48.The authorities cited by the Appellant support a broader interpretation of the court’s jurisdiction. 49.This Court is persuaded that the trial court erred in summarily declining jurisdiction over the claim for mental anguish without fully considering the nature of the claim and the surrounding conduct alleged against the Respondents. Disposition 50.Accordingly, this Court makes the following orders:a)The appeal partially succeeds.b)The finding of the Small Claims Court declining the claim for loss of user is hereby set aside.c)Judgment is entered for the Appellant as follows:i.Kshs. 267,960/= being compensation under the insurance policy;ii.Kshs. 8,560/= special damages;iii.Kshs. 300,000/= for loss of user;iv.Kshs. 200,000/= as general damages for mental anguish and bad faith.Total Kshs. 776,520/=d)The total award shall attract interest at court rates from the date of filing suit until payment in full.e)The Appellant shall have costs of the appeal and proceedings before the trial court.f)For avoidance of doubt, all the other findings of the trial court not expressly interfered with are hereby upheld.It is so ordered. DATED, SIGNED AND DELIVERED AT NAIROBI THIS 28TH DAY OF MAY 2026.HON W. A. OKWANYJUDGEIn the presence ofDerick Appellant in personNo appearance for RespondentUbah - Court Assistant