Murithi v Kenya Alliance Insurance Company Limited (Civil Appeal E016 of 2024) [2026] KEHC 7350 (KLR) (26 May 2026) (Judgment)

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT CHUKA** **CIVIL APPEAL NO. E016 OF 2024** EVANS MURIMI MURITHI……………………. APPELLANT VERSUS KENYA ALLIANCE INSURANCE CO. LTD…………………………………….……RESPONDENT **JUDGEMENT** 1. This appeal emanates from the judgment and decree of Hon. Oscar Wakina Kinyua (RM) in Chuka PMCC No. E40 of 2021. The Plaintiff (Appellant) had sued the Defendant (Respondent) vide a plaint dated 30th May 2023 seeking a declaration that the Defendant is obliged and liable to satisfy the decree arising from the accident case together with interest at 14% p.a from 14th April 2022 till date of payment and costs of the declaratory suit. 2. The Plaintiff’s case was that the Defendant issued insurance policy no. MPI/BR/POL/092978 T.P.O to John Marangu with the intention to indemnify the insured against liability to third parties in the event of an accident caused by or through the use of or connection with the insured’s motor vehicle registration no. KAP 407M against all sums including costs and interest due to the insured. 3. He averred that on or before the 5th of September 2020 during the pendency of the said insurance policy the insured’s motor vehicle was involved in an accident where he sustained injuries. 4. He also averred that on 10th March 2021, he instituted a suit against the insured in Chuka CMCC no. E040 of 2021. On 10th February 2022 judgment was entered against the insured by consent in the ratio of 70%:30% and final judgment was delivered on 14th April 2022 for an award of Kshs. 219,295 and costs assessed at Kshs. 94,510 together with interest from the date of judgment. 5. The Defendant filed a statement of defence dated 5th July 2023 and averred that it had not declined to settle the decretal sum and proposed to have the same settled in three instalments. 6. The matter proceeded for hearing with the Plaintiff calling one witness and the Defendant one witness in support of their cases. Judgment was entered in the following terms: - a declaration that the Defendant is obliged and liable to satisfy the decree arising from the accident case and order that the costs of the declaratory suit be borne by the Defendant. Interests on the costs shall run from the date of judgment of the declaratory suit. 7. Dissatisfied with the judgment, the Appellant lodged the appeal on the following grounds as set out in the Memorandum of Appeal dated 13th June 2024:- 8. The trial court erred in law and in fact in finding that interest was only awarded on the costs in Chuka PMCC No. E40 of 2021. 9. The trial court erred in law and fact in finding that no interest was ordered in respect of the gross of “the net award” (Sic). 10. That the trial court erred in law and fact in purporting that the Plaintiff was inviting it to review the judgment in Chuka PMCC No. E040 of 2021 by asking for a declaration to issue that the Defendant was liable to pay interest at 14% p.a on the decree issued on Chuka PMCC No. E040 of 2021 from 14th April 2022. 11. The trial court erred in principle when at one point it states that interest was only awarded on costs in Chuka PMCC No. E40 of 2021 then in the final analysis abandons even that interest on awards interest on costs of the declaratory suit to run from the date of judgment in the declaratory suit. 12. The trial court erred in law and fact in failing to appreciate that interest is a consideration paid by a party for the delay in paying money after it has become payable and is available whether or not the judgment is silent on the issue, subject to its discretion on the rates as set out in Section 26 of the Civil Procedure Act CAP 21 Laws of Kenya. 13. The trial court erred law and fact in essence reviewing the decree in Chuka PMCC No. E40 of 2021. 14. The Appellant proposed that the court set aside the trial court’s finding that no interest was awarded in the principal sum in Chuka PMCC No. E040 of 2021 and a declaration to issue that that the Defendant is statutorily obliged and liable to satisfy the decree in the accident suit. 15. The Appeal was canvassed by way of written submissions. The Appellant filed written submissions dated 17th September 2025 raising the following issues for determination: - 16. Interest and the rate applicable 17. When interest should be awarded and when it should start accruing. 18. The Respondent filed written submissions dated 29th October 2025 raising one sole issue for determination being the interest rate applicable and whether the trial court that determined the primary suit intended to have the award on interest apply to the net award or on costs only. 19. I have considered the pleadings and the trial record and find the following issues for determination: - 20. Whether the trial court erred in its interpretation of the decree in Chuka CMCC No. E040 of 2021, particularly as to whether interest was payable on the principal sum or limited to costs only, and whether the Appellant was thereby entitled to interest from 14th April 2022. 21. Whether the Respondent is obligated, in the declaratory suit, to satisfy the entire decree including interest and costs, or whether the Appellant’s claim for interest amounted to an impermissible review or variation of the primary judgment. 22. The Appellant submitted that the applicable interest rate is 14 % p.a as restated in the case of **Highway Furniture Mart Ltd v P.S Office of the President & Another [2006] eKLR**. He urged the court to apply the said rate. He submitted that had the court in the accident suit intended that interest was only on costs then it would have clearly stated the same thus the trial court in its judgment essentially reviewed the decree in the accident suit. 23. The Respondent on their part submitted that the court should be guided by Section 26 (2) of the Civil Procedure Act and adopt the rate of 12 %. They relied on the case of **Jane Wanjiku Wambui v Athony Kigamba Hato & 3 Others [2018] eKLR** where the court awarded an interest of 12% from the date of filing the suit. They Further relied on the case of **Kipchumba v BOG Tambach Teachers Training College [2023] KECA 802 KLR** where the court adopted the rate of 12% as opposed to the pleaded rate of 14% by the Appellants. 24. The Respondent submitted that the trial court had exercised its discretion judiciously and the Appellate court will not interfere with such discretion unless it is shown that the trial court misdirected itself in exercise of the jurisdiction. In support of this argument, the Respondent relied on the case of **Apungu Arthur Kibira v Independent Electoral and Commission Boundaries & 3 Others [2019] eKLR.** 25. Section 26 of the Civil Procedure Act grants the court the discretion to award interest on the principal sum adjudged, and such interest ordinarily runs from the date of judgment unless otherwise specified. In **Ajay Indravadan Shah v Guilders International Bank Ltd [2003]** **KLR,** the Court of Appeal affirmed that interest is compensatory in nature, intended to account for the deprivation of money rightfully due. It follows that once a court has awarded interest, a subsequent court cannot reinterpret the decree so as to limit that entitlement without clear wording to that effect. 26. In the present case, there is nothing on record to show that the trial court in the primary suit restricted interest to costs only. By so finding, the trial court in the declaratory suit effectively altered the substance of the decree, which amounted to an error in principle. 27. On the applicable rate, while the Appellant urged for a rate of 14% per annum, the prevailing judicial practice has been to apply court rates, commonly at 12% per annum, unless there are special circumstances warranting a higher rate. In **Kenya Shell Limited v Kobil Petroleum Limited [2006] eKLR,** the Court of Appeal reiterated that the award of interest is discretionary and should be exercised judiciously and in line with prevailing court rates. In the absence of justification for a higher rate, this Court finds that interest at 12% per annum is reasonable. 28. Turning to the second issue, the scope of a declaratory suit against an insurer is well settled. Under the statutory framework, the insurer is obligated to satisfy any judgment obtained against the insured in respect of third-party risks, including all sums payable under the decree. In **Kenindia Assurance Co. Ltd v Otiende [1989] KLR 162**, the Court held that once liability is established, the insurer’s duty extends to satisfying the decree as issued, including costs and interest. 29. The Appellant’s claim for interest did not amount to a review or variation of the judgment in the primary suit. Rather, it was an enforcement of the decree as it stood. A declaratory court is not called upon to reopen or vary the primary judgment but to give effect to it. **In African Highlands & Produce Co. Ltd v Kisorio [2001] KLR 172,** the Court emphasized that a declaratory suit serves to enforce an existing legal obligation and does not confer jurisdiction to alter the underlying judgment. 30. In the circumstances, this Court finds that the Respondent is obligated to satisfy the entire decree in Chuka CMCC No. E040 of 2021, including the principal sum, costs, and interest accruing from 14th April 2022 until payment in full. 31. In the end, the appeal succeeds. The finding of the trial court limiting interest to costs only is set aside. A declaration is hereby issued that the Respondent is liable to satisfy the decree arising from Chuka MCCC No.40 of 2021 together with interest from the date of judgment (in the primary suit) at the rate of 12% per annum until payment in full. 32. The Appellant shall have costs in the declaratory suit and also in this appeal. **Judgement delivered, dated and signed at Chuka this 26th day of May, 2026.** **..........................** **R. LAGAT-KORIR** **JUDGE** **Judgement delivered in the presence of Ms. Masudi for the Respondent, and in the absence of the Appellant. Muriuki (Court Assistant).**