Kitale Shuttle Limited & another v Insurance Regulatory Authority & 3 others (Petition E006 of 2024) [2026] KEHC 8101 (KLR) (10 June 2026) (Judgment)

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT KITALE** **PETITION NO.E006 OF 2024** **KITALE SHUTTLE LIMITED…………………………1ST PETITIONER** **SAMSON WANJALA…………………………………….2ND PETITIONER** **VERSUS** **INSURANCE REGULATORY AUTHORITY………1ST RESPONDENT** **THE ATTORNEY GENERAL ……………………….2ND RESPONDENT** **INVESCO ASSURANCE CO.LTD………………….3RD RESPONDENT** **ROSEMARY NAFULA………………………………..4TH RESPONDENT** **JUDGMENT** 1. Kitale Shuttle Limited and Samson Wanjala, the 1st and 2nd petitioners respectively have brought this petition against the respondents herein. The gist of the petition is that the petitioners being owners of motor vehicle Reg. No.KBX 463B took out Third Party Insurance Cover which was valid upto 23/12/2017. The subject motor vehicle was involved in a road traffic accident when it accidently knocked down one Kennedy Wasike Sifuna (hereinafter to be referred to as deceased) as a result of which he suffered fatal injuries from which he died thereafter. 2. The petitioners aver that the 3rd respondent herein was legally mandated to settle any claim arising from any accident but that when the claim of deceased materialized, it failed to pay despite having full knowledge that judgment had been entered against the petitioners for a sum of Kshs.2,520,000, costs and interests. 3. The petitioners in this petition seek the following reliefs; 4. ***A declaration that the acts of the 1st, 2nd and 3rd respondents in failing to settle the decretal sums due and owing, failed to protect the rights of the petitioners enshrined under Articles 27, 28, 29, 35, 40, 46 and 47 and failed to perform their statutory obligations, acted in breach of national values, discriminatory (sic) and are in violation of the Constitution and to that extend null and void (sic).*** 5. ***That the 1st, 2nd and 3rd respondents be ordered to formulate a plan of action for compensation of the 4th respondents and refund such sums already paid by the petitioners to counsel in legal fees.*** 6. ***Conservatory orders restraining the respondents from any further breach or violation of the rights of the petitioners.*** 7. ***Costs of the petition.*** 8. ***Any other relief the court may deem fit to grant.*** 9. **The petitioners’ case** The petitioners aver that being owners of motor vehicle Reg No.KBX 463B they took out a Third Party Insurance Cover from the 3rd respondent which covered the period between 24/8/2017 to 23/12/2017. That on 5/10/2017 along Kitale-Eldoret road, an accident occurred involving the said motor vehicle where a pedestrian was knocked down and died as a result of the injuries sustained. 1. They contend that they were sued by the personal representatives of the deceased person and duly notified the 3rd respondent to deal with the case. That upon conclusion of trial, judgment was entered against them and a sum of Kshs.2,520,000/- was awarded. 2. They aver that the 3rd respondent was legally mandated to settle the claim and that under Section 67 C of the Insurance Act the 1st respondent has power to intervene in the management of insurance companies. According to the petitioners the failure by the 1st respondent to intervene led to chaos in the insurance industry thus exposing policy holders like the petitioners herein. 3. They aver that the 3rd respondent with full knowledge that a decree had been issued and warrants of attachment obtained by the 4th respondent, neglected to satisfy the decretal sum thus exposing the petitioners to imminent risk of attachment and sale of their fixed and moveable assets. 4. They further contend that the 1st petitioner’s directors are at risk of the corporate veil being lifted and thereby being committed to civil jail. 5. They aver that as a consequence of default by the 3rd respondent, Lifewood Auctioneers proclaimed and threatened to attach moveable assets and that the threats persist. 6. They claim that when the 3rd respondent defaulted in paying and when their goods were attached, Eden Rock Insurance Brokers who are agents of the 3rd respondent came to the rescue and paid partly but the amount is still outstanding including counsel’s fee of Kshs.250,000/-. 7. They claim that the respondents acted in fragrant breach of the Constitution and violated the rights of the petitioners. They contend that under Article 10 of the Constitution, the national values and principles of governance bind all State organs. They fault the respondents for not protecting the interests of the policy holders. 8. It is their case that the attachment levied is because of failure by 1st, 2nd and 3rd respondents to act in accordance with the law and that the attachment of their assets is inconsistent with the provisions of the Constitution therefore void and invalid in their view. 9. They rely on the provisions of Article 27 of the Constitution that provides that every person is equal before the law and have a right to equal protection and benefit of the law. 10. They have cited other provisions of the Constitution which they claim have been violated. They have referred to Articles 28, 29,35,40,46 and 47 of the Constitution as well as Fair Administrative Act Section 2 and Section 4 of the Consumer Protection Act. 11. In their written submissions dated 3/10/2025 done through learned counsel B.N.Munialo & Co Advocates, the petitioners aver that they were forced to pay in order to have their attached property released and that the fact that they paid did not absolve the 3rd respondent from meeting its obligations to pay. 12. They submit the 1st and 2nd respondents are obligated to ensure that all companies that offer insurance services in Kenya including the 3rd respondents are properly run and are capable of indemnifying all their policy holders. 13. They submit that Section 3 of Insurance Act establishes the 1st respondent with its objects and functions provided under Section 3A of the Act to ensure prompt settlement of claims and protection of policy holders. They claim that the 1st respondent failed in its role leading to inability of the 3rd respondent to pay the claim. 14. They submit that the omission of the 1st and 2nd respondents has deprived the petitioners of rights enshrined in Article 46 of the Constitution and that the 1st and 2nd respondents cannot just sit and watch the 3rd respondent failing to fulfill its financial obligations. They submit that doing so is an abdication of their powers given under Section 67 of the Insurance Act. 15. It is their position that they complied with the law by taking out insurance cover of their motor vehicle and paid premiums but the 3rd respondent failed to meet its part of the obligation by abandoning them and thus exposing them to risk of losing property and losing their liberty if they are arrested and committed to civil jail. 16. They rely on the decision of **Muinde & Anor –vs- Insurance Regulatory Authority & 2 others (2022) KEHC 568 (KLR**) in stating that an insurance cover is not just a contractual relationship between the insured and the insurer but a relationship that gives rise to a statutory obligation on the part of insurer. 17. They submit that the State should take keen interests in how the insurance industry is being run because of the potential of having 3rd parties suffering and that because taking insurance cover is compulsory, there is legitimate expectation that the State will ensure that the insurance industry is properly run so that those that get injured through road accidents are duly compensated. 18. They point out that the respondents save for the 4th respondent have not responded to this petition. 19. **The 4th respondent’s case** The 4th respondent, Rosemary Nafula has opposed this petition through a replying affidavit sworn on 9/7/2024, a further affidavit sworn on 7/9/2024 and written submissions through counsel dated 16/3/2026. The 4th respondent avers that she is not a party to the insurance contract between the petitioners and the 3rd respondent and should not be affected in anyway as a judgment creditor in **Kitale CMCC No.57 of 2019** where the petitioners are judgment debtors. 1. She further avers that the petitioners defaulted severally in paying decretal sum forcing her to execute to put pressure on the 3rd respondent to pay. 2. She contends that the petitioners are persons of means as they own over 300 passengers transport vehicles plying various routes in Kenya and that they should be in a position to pay and claim reimbursement from the 3rd respondent. 3. That owing to pressure exerted, the petitioners so far have paid Kshs.2,100,000/- and that if she is prevented from executing for the remaining balance, there will be no pressure for them to pay. 4. She avers that this petition is meant to prevent her from enjoying the fruits of judgment in **Kitale CMCC NO.57 of 2019**. 5. She argues that the petitioners should file a declaration suit against the respondents if they are dissatisfied with the conduct of their insurer and the 3rd respondent would be compelled to pay. 6. She contends that there is a possibility of collusion between the petitioners and the 3rd respondent to lodge this petition in order to obtain a stay of execution in **Kitale CMCC No.57 of 2019.** 7. In her further affidavit sworn on 27/9/2024 the 4th respondent depones that the 3rd respondent had been placed under statutory management and is therefore unable or incapable to pay the decretal sum adding that the prayers sought in the petition will prejudice her because she may never be compensated. 8. She contends that the petition herein has just been brought by the petitioners for the aim of shielding them from execution. 9. In her written submissions dated 16/3/2026 through her learned counsel M/s Okile & Co Advocate, she submits that the petition herein lacks merit and is only meant to deny her fruits of her judgment. 10. **The 1st respondent’s case.** The Insurance Regulatory Authority has raised a preliminary objection dated 7/1/2026 contending that the amended petition offends the provisions of Section 432(2) of the Insolvency Act which provides that once a liquidation order has been made or a provisional liquidator appointed proceedings against such company placed under liquidation can only be filed or continued with the approval of court. The 1st respondent submits that the petitioners have not sought leave and therefore in their view this court is divested of jurisdiction to entertain or determine it. The 1st respondent further submits that the suit offends the doctrine of exhaustion because of the availability of alternative mechanism within the letter and meaning of Section 204A of the Insurance Act and Section 9(2) of Fair Administrative Act 2015 to resolve the problem. 1. It avers that at the time of placement of the 3rd respondent under Statutory Management, the 1st respondent had not received any complaint from the petitioners. 2. The 1st respondent further faults this petition on grounds that it offends Article 201(d) of the Constitution. It takes the position that the petitioners are seeking to have the 1st respondent a State owned entity to settle liabilities arising from a private contractual relationship between the petitioners and 3rd respondent. 3. The 1st respondent in its written submission dated 19/1/2026 through learned counsel John Mueke has added more weight to their preliminary objection raised herein. 4. It submits that the petition and the amended petition offends Section 432 of the Insolvency Act and to buttress the contention it relies on the case of **Jatomy Supermarkets Limited AKA Jatomy Enterprises Ltd –vs- Kenafric Industries Limited & 2 others (Insolvency Petition No.E012 of 2011) 2025 KEHC 3141 (KLR)** where the court upheld a preliminary objection based on Section 432 of Insolvency Act and found that the leave or approval from court to proceed against a company under liquidation is meant to protect the integrity of the liquidation process and prevent unnecessary interferences in the administration of the company assets. 5. It contends that a liquidation order was issued against the 3rd respondent by Justice Francis Gikonyo in **Milimani Insolvency Petition No.HCCO MMIP NO.E087 of 2024** on 31/7/2025 and the petitioners herein have never sought leave to continue with this suit. It also further relies on the decision of **Nakumatt Holdings Limited and Anor –vs- Ideal Locations Limited (2019) eKLR** to buttress the same point further . 6. The 1st respondent further submits this petition also offends the doctrine of privity of contract because the issues herein arose from a private insurance contract between the petitioners and the 3rd respondent. That the 1st respondent is neither a party to the said contract or privy to the agreement between the said parties. It submits that contracts only bind the parties to contract. That the insurance contract in this case was initiated by the insurer and was accepted by the petitioners and as such the rights and obligations arising therefrom binds the said parties. It relies on the decision of **Redington Kenya Limited –vs- Thomas N. Nabende & Anor (2021)eKLR**. 7. It further contends that because the petitioners did not file any complaint with the 1st respondent against the respondents prior to the latter being placed under receivership, the petition herein offends the doctrine of exhaustion. It relies on the provision of Section 204A of the Insurance Act. 8. It submits that where a Statute provides a prescribed mode or way of resolving a dispute, a party can only seek court’s intervention after exhausting all the prescribed avenues and that to that extent this petition herein is premature and the jurisdiction of this court to intervene is premature in light doctrine of ripeness. In that regard it relies on the decision of **Mwanzia –vs- Rhodes (2023) KEHC 2688 (KLR).** 9. The 1st respondent has also relied on the following authorities to buttress its contention that this petition offends that doctrine of exhaustion and/or ripeness. It relies on the following decisions; 10. ***William Odhiambo Ramogi & 3 Others –vs- A.G & 4 Others Muslims for Human Rights & 2 Others (Interested Parties) (2020) eKLR.*** 11. ***Peter Oduor Ngoge –vs- Francis Ole Kaparo & Others (2012) eKLR.*** 12. The 1st respondent finally contends that the petition herein raises matters that are civil and commercial in nature that do not raise Constitutional issues. That the petition does not disclose violation of rights and freedoms but violation of insurance contract. In that regard it relies on the decision of **Aliela –vs- Kenton College Trust & Anor (2023) KEELRC 226 (KLR).** 13. This court has considered this petition and the response made. While it is true as contended by the petitioners that only the 4th respondent filed a replying affidavit, the 1st respondent filed preliminary objection to this petition on points of law though in instances it has waded into matters of fact and law. 14. This court finds that though the point of doctrine of exhaustion/ripeness is well taken by the 1st respondent it ought to have filed an affidavit affirming that the petitioners have circumvented due process by failing to exhaust internal mechanism provided for by the law or that it had not received any complaint from it pursuant to Section 204A of the Insurance Act. 15. I however find that the petitioners were duly notified of the nature of the preliminary objection filed herein. They therefore had a chance to dispute the fact but did not. This can only mean that the petitioners had no answer for failing to utilize the prescribed mechanism under Section 204A of the Insurance Act. The section provides as follows; ***“(1)Any insurance customer may lodge a written complaint with the Commissioner against a regulated entity in relation to the provision of its services.*** ***(2)Subject to subsection (3), where the Commissioner determines a dispute such determination shall be binding on the parties to the dispute.*** ***(3)A party that is dissatisfied with the determination of the dispute by the Commissioner may within thirty days appeal the determination to the Tribunal”.*** 1. It is apparent therefore flowing from the above that the cited Statute establishes a legal avenue for consumer protection and dispute resolution mechanism in the insurance sector. Any person aggrieved by inaction or omission(s) by his insurer has a prescribed legal avenue to seek redress. 2. To that extent that there is no response by the petitioners on why they did not use the prescribed route in addressing their grievance, I find that the 1st respondent’s objection in that regard is well taken. 3. The Statute to wit Section 9(2) Fair and Administrative Action Act displaces the jurisdiction of this court from intervention unless a party demonstrates that all remedies available under any written law have been exhausted. 4. This court therefore finds that this suit from inception was a misconception for offending the doctrine of exhaustion and/or ripeness. This court is persuaded by the 1st respondent’s contentions in that regard and in particular the decisions in **Republic –vs- Eldoret Water & Sanitation Company & 2 Others (2024) KEHC 15365 (KLR) and Mwanzia –vs- Rhodes (2023) KEHC 2688 (KLR).** 5. A court should be utilized only as a forum of last resort rather than the first part of call where a legal mechanism is prescribed by law for parties to seek redress. The position is underpinned under Article 159(2) (C) of the Constitution which binds this court to promote alternative forums of dispute resolutions mechanisms unless it is demonstrated which has not been done here, that that prescribed mechanism would lead to miscarriage of justice. 6. This court also finds that the petitioners herein in their quest for justice appear to have fallen into some procedural misstep because as the 1st respondent correctly points out the petitioners orally applied to amend their petition on 25/2/2025 to bring in the receiver manager of the 3rd respondent without seeking leave first to enjoin it to this petition as provided by Section 432(2) of the Insolvency Act which provides as follows; ***“When a liquidation order has been made or a provisional liquidator has been appointed, legal proceedings against the company may be begun or continued only with the approval of the Court and subject to such conditions as the Court considers appropriate”.*** 1. The law required the petitioners in seeking leave for joinder to notify the liquidator to the 3rd respondent so that it is aware of the existence of this claim before seeking orders against it. 2. What is however more glaring in this petition is that going by the pleadings and evidence placed before this court, the petitioners’ claim is majorly hinged on breach of contract as opposed to Constitutional breaches. The petitioners’ grievance are based on breach of contractual obligations by the 3rd respondent which grievance in my view can effectively be addressed by an ordinary suit or declaratory suit. You do not need a Constitutional interpretation to resolve the issue. 3. A Constitutional petition addresses and seeks for enforcement of matters to do with human rights, the bill of rights and fundamental freedoms under Articles 19 and 20 of the Constitution as opposed to ordinary suits that address general disputes like property disputes, tort claims or breaches of contract as obtains in this instance. The claim herein is primarily based on a contractual relationship between the petitioners and the 3rd respondent. The petitioners’ claim is that the 3rd respondent failed to meet its obligation by failing to pay a claim that was properly insured and as a result exposed the petitioners to execution and the attendant losses. That issue in my view is a commercial dispute rather than infringement of bill of rights and fundamental freedoms. The petitioners have not pleaded clearly the acts or omissions by the respondents that have infringed on their Constitutional rights. In the end this court finds that the petition herein is simply unsustainable. The same is struck out with costs. **DELIVERED, DATED** and **SIGNED** at **KITALE** this **……10th .…** day of **………………JUNE……….……………., 2026.** **HON JUSTICE R.K. LIMO** **KITALE HIGH COURT** ***Judgment delivered in open court*** ***In the presence of*** ***Munialo for petitioner*** ***Mueke for 1st respondent*** ***Lotir for the Attorney General for 2nd respondent*** ***Duke/Chemosop- court assistants***