https://new.kenyalaw.org/akn/ke/judgment/scc/2026/47

Mwangi v Occidental Insurance Company Ltd (Commercial Case E103446 of 2025) [2026] SCC 47 (KLR) (29 June 2026) (Judgment) Neutral citation: [2026] SCC 47 (KLR) Republic of Kenya In the Milimani Small Claims Court Commercial Case E103446 of 2025 GW Kiamah, RM June 29, 2026 Between Caroline Wanjiku Mwangi Claimant and Occidental Insurance Company Ltd Respondent Judgment 1.The claimant instituted this suit via a statement of claim dated 7/10/2025 seeking judgment against the claimant for Kshs. 208,210.00/= on the basis that judgment in Milimani SCC No. E1347 of 2025 was entered in favour of the claimant against the respondent’s insured, Ndemi Gardens Limited. That prior to the delivery of the said judgment, the respondent had issued a discharge voucher in settlement of the claim which remains unpaid to date despite demand. 2.The respondent filed a response dated 21/10/2025 as well as witness statement sworn bu the respondent’s legal manager on even date. The respondent denied owing the claimant the claimed amount and contested that the respondent was never a party in the alleged suit. The respondent also denied that it had insured the motor vehicle registration number KCQ 2573 and denied liability to settle the judgment award. 3.The matter proceeded under Section 30 of the Small Claims Act and the claimant filed submissions dated 27/10/2025 whereas the respondent’s were dated 6/11/2025. 4.I have seen and considered the pleadings, testimonies, evidence and submissions before court. The main issue for determination is whether the claimant has proven that the respondent was liable to settle the judgment award issued in Milimani SCC No. E1347 of 2025. 5.The standard of proof in civil claims is on a balance of probabilities. See the Court of Appeal in Mumbi M'Nabea v David M. Wachira [2016] eKLR. 6.Sections 107, 108 and 109 of the Evidence Act, Chapter 80 of the Laws of Kenya places the burden of proof of a fact on the person who wishes the court to believe in the existence of such fact. 7.It is trite that a discharge voucher constitutes a binding settlement agreement where parties freely and voluntarily execute it in full and final settlement of a claim as the same constitutes evidence of admitted liability. However, such a voucher may be impeached where it is shown that it was obtained through fraud, coercion, misrepresentation, or without full knowledge of its implications. In Coastal Bottlers Ltd v Kimathi Mithika [2018] eKLR, the Court of Appeal held that where a party freely signs a discharge voucher, they are bound by it and may be precluded from pursuing further claims. 8.Further, execution of a discharge voucher does not absolve a party from the obligation to honour the settlement therein noting that the same constitutes a promise to pay but not proof of payment. In Britam General Insurance v Odinga [2024] KEHC, the court underscored that execution of a discharge voucher does not negate the insurer’s duty to honour the agreed settlement. 9.The burden of proof lies on the part seeking to rely on a discharge voucher and must show that the same was properly executed and intended as full settlement. 10.Though the respondent denied insuring the subject motor vehicle in the previous suit, I do note from the correspondence on record that upon being served with the statutory notice, the respondent immediately engaged the claimant and negotiations ensued leading to the issuance of the discharge voucher dated 4/6/2025 wherein the respondent committed to settle the judgment award within 60 days thereof. Indeed, the claimant issued a demand for settlement on the basis of the discharge voucher vide email dated 28/7/2025. Further, the police abstract on record identified the respondent as the insurer of the subject motor vehicle and at no point did the respondent ever deny insuring the said vehicle. 11.Though the respondent denied issuing the voucher, I do note that the same was issued in its letter head noting that it was the letter head appearing in all its correspondence with the claimant’s advocate. 12.The corresponding evidence produced being numerous correspondence between the parties as regards settlement of the claim and the general conduct of the respondent estoppes it from denouncing the discharge voucher. Noting that the respondent did not allege that the same was acquired through fraud, coercion, misrepresentation, or without full knowledge of its implications, I do find that the discharge voucher dated 4/6/2025 created a contractual obligation and the respondent was bound to settle the judgment award. 13.From the foregoing, I do find that the claimant has successfully proven the claim as against the respondent. Consequently, the respondent is liable to settle the claimed sums. To that end, I I hereby order as follows: -1.Judgment is hereby entered in favour of the claimant as against the respondent for the sum of Kshs. 208,210/=2.The claimant is awarded costs Kshs. 20,000/= 14.The respondent is awarded 30 days stay of execution.It is so decreed. DATED AND DELIVERED AT NAIROBI VIA CTS THIS 29TH DAY OF JUNE 2026HON. GLADYS W. KIAMAHRESIDENT MAGISTRATE/ADJUDICATOR