[2007] KEHC 3607 (KLR)
The court found that section 145 of the Insurance Act does not create a direct relationship or privity of contract between the applicant (insured) and the 3rd respondent (Kenya Reinsurance Corporation). The insurance contract was between the applicant and Kenya National Assurance, which is now under liquidation, and...
Source-derived case information.
- Citation
- [2007] KEHC 3607 (KLR)
- Parties
- Applicant: Holbert D. Njoroge; Respondent: Commissioner of Insurance & 2 Others
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Law Courts)
- Jurisdiction
- Kenya
- Case Number
- ? 1356 of 2003
- Procedural Posture
- Miscellaneous Application / Ruling on Chamber Summons for Stay of Execution and Set Off of Costs
- Outcome
- application dismissed with costs to the applicant
- Judges
- RPV Wendoh
- Legal Topics
- Stay of Execution, Costs Taxation, Reinsurance Liability, Privity of Contract
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Holbert D. Njoroge
Applicant
Commissioner of Insurance & 2 Others
Respondent
Procedural Posture
Miscellaneous Application / Ruling on Chamber Summons for Stay of Execution and Set Off of Costs
Legal Issues
- 1 Whether the applicant is entitled to a stay of execution pending hearing of the application.
- 2 Whether the 3rd respondent (Kenya Reinsurance Corporation) is liable to satisfy 25% of the decretal sum under section 145 of the Insurance Act.
- 3 Whether there exists privity of contract between the applicant and the 3rd respondent to warrant a set off or direct claim for costs.
Ratio Decidendi
The court found that section 145 of the Insurance Act does not create a direct relationship or privity of contract between the applicant (insured) and the 3rd respondent (Kenya Reinsurance Corporation). The insurance contract was between the applicant and Kenya National Assurance, which is now under liquidation, and the reinsurance contract was between Kenya National Assurance and the 3rd respondent. The applicant failed to demonstrate that his loan was reinsured with the 3rd respondent, and only Kenya National Assurance could bring such an action. Therefore, the applicant has no claim against the 3rd respondent, and the application was dismissed with costs to the applicant.
Court Disposition
application dismissed with costs to the applicant
Orders
- The application is dismissed.
- The applicant shall bear the costs of the application.
Full Case Text
Judgment text and source record
24 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA
AT NAIROBI (NAIROBI LAW COURTS)
Misc Appli 1356 of 2003
HOLBERT D. NJOROGE…………………..……………………….APPLICANT
Versus
COMMISSIONER OF INSURANCE & 2 OTHERS….........…..RESPONDENT
RULING
Before me is the Application (Chamber Summons) dated 1st November 2006 brought pursuant to S.3 A Civil Procedure Act, Reinsurance Act Cap 487 Laws of Kenya
Applicant, Holbert Njoroge, seeks orders that there be a stay of execution pending hearing of this Application; that the court orders a set off of the costs demanded against the Statutory provisions of Settlement by Kenya Reinsurance Cooperation, that the attached motor vehicle be released and costs be in the cause.
The dispute herein relates to costs only. There is a judgment against the Applicant for Kshs.3 million and the Applicant contends that under S. 145 of the Kenya Reinsurance Corporation Act, the said party is enjoined to pay 25% of all policies that are reinsured by it. That therefore the Respondent should satisfy 25% of the decretal sum.
The Application was opposed and a Replying Affidavit sworn by Jane Florence Otieno, the Corporation Secretary of the 3rd Respondent was filed. She depones that the bill of costs was taxed at Kshs.76,545/= and after issue of a certificate, the Respondent initiated execution proceedings. It is the 3rd Respondent’s contention that the Applicant never preferred any reference to the High Court in respect of the Ruling on taxation, challenging the costs and that there is no contract of issurance between the Applicant and the 3rd Respondent. That S.145 of the Insurance Act which is relied upon makes Reinsurance mandatory as between the 3rd Respondent and other Insurers and there is therefore no privity of contract between the Applicant and the 3rd Respondent. The Applicant had insured with Kenya Nationa Assurance which went under liquidation.
Section 145 of Insurance Act reads:
“145 (1) subject to this Act, every insurer shall reinsure with the Kenya Reinsurance Corporation such properties of each policy of Insurance issued or renewed in Kenya by the insurer, in such proportion and in such manner and subject to such terms and conditions as are prescribed.
(2) Subject to this Act, every Insurer shall also place with the Corporation in addition to the reinsurance specified under Subsection (i) such proportion of its reinsurance business from Kenya placed in the international Reinsurance market excluding facultative Reinsurance, in such properties and in such manner and subject to such terms and conditions as are prescribed.”
The said Section does not create any direct relationship between the 3rd Respondent and the Applicant. The contract of Insurance was between the Applicant and his Insurance Company, the Kenya National Assurance which is now under liquidation. The Reinsurance contract was between the 3rd Respondent and Kenya National Assurance. There is no privity of contract between the 3rd Respondent and the Applicant.
Though the Kenya National Assurance was required to reinsure with the 3rd Respondent it has to be proved that indeed the Applicants loan was reinsured with the 3rd Respondent which the Applicant has not demonstrated and for that reason it is only the Kenya National Assurance who can bring such an action against the 3rd Respondent.
I do agree with the Respondent that the Applicant has no claim against the 3rd Respondent and this Application is dismissed with the Applicant bearing the costs.
Dated and delivered this 19th day of June 2007.
R.P.V. WENDOH
JUDGE
Read in presence of:
Mr. Nduhiu for Applicant
Daniel: Court Clerk