Oeri v Kenyan Alliance Insurance Company Ltd & 2 others (Civil Case E005 of 2025) [2026] KEHC 13256 (KLR) (28 May 2026) (Judgment)

** REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NYAMIRA** **(CHERERE-J)** **HCCC E005 OF 2025** **BETWEEN** **NEDDY KERUBO OERI.................................................................PLAINTIFF** **AND** **THE KENYAN ALLIANCE INSURANCE COMPANY LIMITED.......................................................................................DEFENDANT** **AND** **MARGARET WANGECI SANCHA.................1ST INTERESTED PARTY HEZBORNE KENGARA MIKURO................2ND INTERESTED PARTY** **JUDGMENT** 1. The Plaintiff, Neddy Kerubo Oeri, instituted these proceedings vide the Plaint dated 04th June 2025 seeking declaratory and consequential reliefs against the Defendant, The Kenyan Alliance Insurance Company Limited, seeking the following orders: 2. **A declaration that the Defendant is liable to indemnify the Plaintiff against liability and/or sums adjudged as payable to persons in suits arising from the accident involving motor vehicle registration number KCL 915D on 11th December 2020;** 3. **A declaration that the Defendant is liable and/or legally obligated to satisfy judgments and decrees arising from suits filed and/or to be filed by third parties against the Plaintiff in relation to the said accident involving motor vehicle registration number KCL 915D;** 4. **Costs of the suit and interest.** 5. The Plaintiff stated that she was at all material times the registered owner of motor vehicle registration number KCL 915D, a Toyota Axio, which she had insured with the Defendant under Policy Number MPI/CH/POL/109114 for the period commencing 27th May 2020 and expiring 26th May 2021. PW1, Neddy Kerubo Oeri, testified that the said policy was valid and subsisting as at 11th December 2020, the date of the accident. In support of her evidence, she produced a copy of her National Identity Card as P. Exhibit 1, an Insurance Risk Note as P. Exhibit 2, the Policy Document as P. Exhibit 3, Email Correspondences as P. Exhibit 4, and a Certified Copy of a Sidian Bank Statement as P. Exhibit 5. 6. PW1 narrated that on 11th December 2020, during the subsistence of the said policy, motor vehicle registration number KCL 915D was involved in a road traffic accident along the Keroka–Kisii Road, resulting in injuries to passengers travelling therein. She explained that the vehicle was at the material time being driven by her late husband with her authority and that the injured passengers were family friends known to her husband. She denied that the vehicle was being operated as a public service vehicle or for commercial hire at the material time. Following the accident, suits were instituted against the Plaintiff in Keroka PMCC E099 of 2021 filed by Margaret Wangeci Sancha and Keroka PMCC E100 of 2021 filed by Hezborne Kengara Mikuro. 7. PW1 further told the Court that judgments and decrees were subsequently entered against her in both suits and that warrants of attachment were thereafter issued, the Defendant having failed and/or refused to satisfy the third-party claims notwithstanding demand and statutory notice. In support thereof, she produced Warrants of Attachment in Keroka PMCC E099 of 2021 as P. Exhibit 6, Warrants of Attachment in Keroka PMCC E100 of 2021 as P. Exhibit 7, and a Demand Letter dated 27th May 2025 as P. Exhibit 8. 8. Consequently, the Plaintiff sought the following orders: **a) A declaration that the Defendant is liable to indemnify the Plaintiff against liability and/or sums adjudged as payable to persons in suits arising from the accident involving motor vehicle registration number KCL 915D on 11th December 2020;** **b) A declaration that the Defendant is liable and/or legally obligated to satisfy judgments and decrees arising from suits filed and/or to be filed by third parties against the Plaintiff in relation to the said accident involving motor vehicle registration number KCL 915D; and** **c) Costs of the suit and interest**Top of Form Bottom of Form 1. The Defendant opposed both the Plaintiff’s claim and the Interested Parties’ Cross-Claim stating that although it insured motor vehicle registration number KCL 915D, the Plaintiff breached the terms of the insurance policy by using the vehicle for hire or reward contrary to the limitation as to use clause contained in the policy document. The Defendant further stated that investigations conducted into the accident established that the motor vehicle had been used for carriage of passengers for hire or reward contrary to the terms of the policy. 2. The Defendant also stated that the Interested Parties’ Cross-Claim was incompetent, premature and res judicata by reason of the judgments delivered in Milimani MCCC E3954 of 2023, Margaret Wangeci Sancha v Kenya Alliance Insurance Company Limited and Milimani MCCC E3960 of 2023, Hezborne Kengara Mikuro v Kenya Alliance Insurance Company Limited. The Defendant further stated that the Interested Parties lacked locus standi to agitate claims founded on the insurance contract and that the suit offended the doctrine of exhaustion under Section 204A of the Insurance Act. 3. In support of the Defendant’s case, Theresa Mwende, a Legal Officer employed by the Defendant, testified that the Plaintiff notified the Defendant of the accident through a Claim Form dated 29th January 2021 together with supporting documents which were produced as D Exhibit 1. The said documents comprised the Motor Accident Claim Form, questionnaires completed by the Plaintiff, a Police Abstract relating to the accident and supporting records relating to the insured motor vehicle and the accident investigations. The witness further produced a Letter dated 18th January 2023 as D Exhibit 2 through which the Defendant communicated its decision to repudiate liability under the insurance policy after investigations allegedly established that the insured motor vehicle had been used for hire or reward contrary to the limitation as to use clause contained in the policy. The witness also produced judgments in Milimani MCCC E3954 of 2023, Margaret Wangeci Sancha v Kenya Alliance Insurance Company Limited and Milimani MCCC E3960 of 2023, Hezborne Kengara Mikuro v Kenya Alliance Insurance Company Limited as D Exhibit 3(a) and D Exhibit 3(b) respectively in support of the Defendant’s contention that the Interested Parties’ claims had previously been litigated and determined. The witness further testified that the Defendant compensated the Plaintiff for damage to the insured motor vehicle before investigations were concluded and later repudiated liability after investigations allegedly established that the vehicle had been used for hire. 4. The Defendant also called John Gitau, the Principal Officer of Candid Investigators & Loss Assessors, who testified that he personally investigated the claim and prepared the Investigation Report dated 26th May 2021 which was produced as D Exhibit 4. He testified that the investigations established that the accident motor vehicle had allegedly been hired to transport passengers from Naivasha to Keroka and that KES. 12,000 had allegedly been paid to the deceased driver for the journey. During cross-examination, the witness admitted that he did not possess any documentary proof confirming payment of the alleged KES. 12,000 and did not record signed witness statements from the persons said to have supplied the information contained in the investigation report. The witness further admitted that the Plaintiff’s alleged statement in the investigation report indicating that the vehicle was transporting persons to a funeral was unsigned and that there was no documentary proof of the alleged payment for transport services. 5. Consequently, the Defendant prayed that the Plaintiff’s suit together with the Interested Parties’ Cross-Claim be dismissed with costs. 6. With the consent of the parties, Margaret Wangeci Sancha and Hezborne Kengara Mikuro were, by an order dated 02nd March 2026, joined to these proceedings as the 1st and 2nd Interested Parties respectively. Prior to their joinder, the Interested Parties had filed their Defence and Cross-Claim dated 28th January 2026 together with the Witness Statement of Margaret Wangeci Sancha dated 20th January 2026, which pleadings were subsequently admitted by the Court as properly on record. 7. Margaret Wangeci Sancha testified on behalf of the Interested Parties and adopted her Witness Statement dated 20th January 2026 as her evidence in chief. The witness stated that on 11th December 2020 they were lawfully travelling as passengers aboard motor vehicle registration number KCL 915D along the Keroka–Kisii Road when the driver negligently lost control of the vehicle causing an accident in which they sustained severe injuries. 8. The witness further stated that they were travelling to Keroka for a dowry ceremony and that the vehicle had not been hired for commercial transport. The witness also stated that the deceased driver was a family friend known to them for about eight months and that they did not pay KES. 12,000/= to the deceased driver as alleged by the Defendant’s investigator. In support of her evidence, the witness produced Statutory Notice dated 12th April 2021 as IP Exhibit 1, Police Abstract dated 27th January 2021 as IP Exhibit 2, NTSA Search dated 08th April 2021 as IP Exhibit 3, Judgment in Keroka PMCC E100 of 2021 dated 06th April 2022 as IP Exhibit 4, Decree therein as IP Exhibit 5, Judgment in Nyamira HCCA E020 of 2022 as IP Exhibit 6, Decree therein as IP Exhibit 7, Statutory Notice relating to Keroka PMCC E099 of 2021 as IP Exhibit 8, Judgment in Keroka PMCC E099 of 2021 as IP Exhibit 9, Decree therein as IP Exhibit 10, Judgment in Nyamira HCCA No. 1 of 2022 as IP Exhibit 11, Decree therein as IP Exhibit 12, Amended Decree in Keroka PMCC E100 of 2021 as IP Exhibit 13, Warrants of Attachment in Keroka PMCC E100 of 2021 as IP Exhibit 14, Amended Decree in Keroka PMCC E099 of 2021 as IP Exhibit 15, Warrants of Attachment in Keroka PMCC E099 of 2021 as IP Exhibit 16 and Investigation Report by Mirox Insurance Investigatory Ltd dated 25th March 2025 as IP Exhibit 17. 9. Consequently, the Interested Parties sought the following orders: * 1. **A declaration that the Defendant is bound to honour and satisfy** **the Amended Decree issued in Keroka Civil Case E100 of 2021, Hezborne Kengara Mikuro v Neddy Oeri and Charles Ngotho Ndungu, in the sum of KES. 1,078,417.64 together with costs of KES.104,072.00 and interest at court rates from 29th November 2024 until payment in full;** 2. **A declaration that the Defendant is bound to honour and satisfy the Amended Decree issued in Keroka Civil Case E099 of 2021, Margaret Wangeci Sancha v Neddy Oeri and Charles Ngotho Ndungu, in the sum of KES. 1,576,848.31 together with costs of KES. 104,072.00 making a total of KES.1,680,920.31;** 3. **Costs of the suit together with interest at court rates from the date of judgment until payment in full; and** 4. **Any other or further relief that the Court may deem fit and just to grant.** 10. The Plaintiff filed written submissions dated 19th May 2026 through the firm of Warui & Irungu Company Advocates submitting that the Defendant was under a statutory obligation pursuant to Section 10(1) of the Insurance (Motor Vehicles Third Party Risks) Act to satisfy judgments arising from the accident involving motor vehicle registration number KCL 915D since the insurance policy was valid at the material time. Counsel further submitted that the Defendant neither cancelled the policy nor obtained declaratory orders under Section 10(4) of the Act avoiding liability and challenged the credibility of the Defendant’s investigation report on the ground that it lacked documentary proof establishing that the motor vehicle had been hired for commercial purposes. 11. The Defendant through the firm of G. Mutua Molo & Company did not file any submissions. 12. The Interested Parties filed written submissions dated 11th May 2026 through the firm of MK Mwangi Advocates LLP submitting that the Defendant failed to discharge the burden of proving breach of the insurance policy and that the investigation report relied upon by the Defendant was unsupported by documentary evidence or independent proof of payment for transport services. Counsel further submitted that the Defendant failed to comply with Section 10(4) of the Insurance (Motor Vehicles Third Party Risks) Act before repudiating liability under the policy and that the plea of res judicata was inapplicable since the issues arising in the present proceedings differed from those determined in the Milimani suits relied upon by the Defendant. 13. Having considered the pleadings, evidence adduced and submissions filed by the parties, the following issues arise for determination: 14. **Whether the Plaintiff breached the terms of the insurance policy issued by** **the Defendant;** 15. **Whether the Defendant lawfully repudiated liability under the insurance policy;** 16. **Whether the Defendant is liable under Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act to satisfy the judgments and decrees arising from Keroka PMCC E099 of 2021 and Keroka PMCC E100 of 2021;** 17. **Whether the Interested Parties’ Cross-Claim is incompetent, premature and/or res judicata; and** 18. **Who should bear the costs of the suit and Cross-Claim?** 19. In the first issue, the Court is called upon to determine whether the Plaintiff breached the terms of the insurance policy issued by the Defendant by allegedly using motor vehicle registration number KCL 915D for hire or reward contrary to the limitation as to use clause contained in the policy document. The Defendant relied on the Investigation Report produced as D Exhibit 4 and the testimony of DW2 John Gitau in contending that the Interested Parties had allegedly paid KES. 12,000 to the deceased driver for transport from Naivasha to Keroka. 20. The Plaintiff and the Interested Parties denied that the motor vehicle was being used for commercial transport and maintained that they were travelling for a dowry ceremony and that the deceased driver was a family friend. During cross-examination, DW2 admitted that there was no documentary proof confirming the alleged payment for transport services and that the Plaintiff’s alleged statement contained in the investigation report was unsigned. 21. I have carefully considered the pleadings, evidence adduced and submissions by the parties. Under Sections 107 and 109 of the Evidence Act, the burden of proving breach of the insurance policy rested upon the Defendant since it was the party alleging that the insured motor vehicle had been used for hire or reward contrary to the limitation as to use clause contained in the policy. 22. In **Evans Otieno Nyakwana v Cleophas Bwana Ongaro [2015] eKLR**, the Court of Appeal emphasized that allegations must be supported by credible evidence and not mere assertions, while in **Palace Investment Ltd v Geoffrey Kariuki Mwenda & Another [2015] eKLR**, the Court of Appeal observed that proof on a balance of probabilities requires evidence showing that the occurrence of a fact is more probable than its non-occurrence. Similarly in **William Kabogo Gitau v George Thuo & 2 Others [2010] eKLR**, the Court of Appeal emphasized that the burden of proof in civil proceedings rests upon the party asserting a fact and that allegations must be supported by cogent and credible evidence. The Court further observed that a claim founded on speculation, suspicion or unsubstantiated assertions cannot satisfy the threshold of proof on a balance of probabilities. 23. In the present matter, apart from the assertions contained in the investigation report, the Defendant failed to produce any documentary, electronic or independent evidence proving that the Interested Parties paid fare or that the motor vehicle was being operated commercially for hire or reward. 24. The investigation report relied upon by the Defendant was substantially weakened during cross-examination and remained unsupported by documentary or independent evidence capable of proving that the motor vehicle was being operated for hire or reward. 25. Consequently, the Court is not satisfied that the Defendant proved, on a balance of probabilities, that the Plaintiff breached the terms of the insurance policy. 26. In the second issue, the Court is called upon to determine whether the Defendant lawfully repudiated liability under the insurance policy. The Defendant contended that it lawfully repudiated liability after investigations allegedly established breach of the limitation as to use clause contained in the insurance policy. In summary, the Defendant’s evidence was that it declined to honour further third-party claims after investigations allegedly established that the insured motor vehicle had been used for hire or reward contrary to the terms of the policy. However, it was admitted during cross-examination that the Defendant neither cancelled the insurance policy nor instituted declaratory proceedings seeking to avoid liability under the policy. 27. The Plaintiff and the Interested Parties submitted that the Defendant failed to comply with the mandatory provisions of Section 10(4) of the Insurance (Motor Vehicles Third Party Risks) Act before purporting to repudiate liability under the policy. 28. Section 10(1) of the Insurance (Motor Vehicles Third Party Risks) Act imposes a statutory obligation upon an insurer to satisfy judgments obtained against persons insured under a policy contemplated under the Act, while Section 10(4) thereof provides the statutory mechanism through which an insurer may avoid such liability by instituting declaratory proceedings within the prescribed period. 29. In **Joseph Mwangi Gitundu v Gateway Insurance Co. Ltd [2015] eKLR**, the High Court, in a persuasive decision, held that an insurer remains under a statutory obligation to satisfy judgments obtained against its insured unless liability is lawfully avoided in accordance with the Act. Similarly, in **Invesco Assurance Co. Ltd v David Kinyanjui Gichuki & Another [2016] eKLR**, the Court of Appeal held that repudiation of liability by an insurer does not absolve the insurer from the statutory duty imposed under Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act unless the insurer has successfully obtained declaratory orders avoiding liability. 30. Likewise, in **UAP Insurance Co. Ltd v Patrick Charo Chiro [2021] eKLR, the High Court** reiterated that an insurer seeking to avoid liability under Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act must strictly comply with the statutory procedure prescribed under Section 10(4) of the Act by instituting declaratory proceedings within the prescribed period, failing which the insurer remains bound to satisfy judgments arising from risks covered under the policy. 31. The Plaintiff further relied on the decision in **Gitonga (suing as the Legal Representative and Administrator of the Estate of Patrick Josiah Wanyeki Mwangi - Deceased) v Cannon Assurance Limited [2026] KECA 93 (KLR)** where the Court of Appeal reaffirmed that an insurer seeking to avoid liability must strictly comply with the procedure prescribed under Section 10(4) of the Act and that failure to institute declaratory proceedings within the prescribed period leaves the insurer statutorily bound to satisfy the judgment obtained against the insured. 32. In this case, the Defendant admittedly received statutory notices relating to the primary suits and further admitted that it settled some claims arising from the same accident. Despite that knowledge, the Defendant neither cancelled the policy nor instituted declaratory proceedings seeking avoidance of liability under Section 10(4) of the Act. 33. Consequently, the Court finds that the Defendant did not lawfully repudiate liability under the insurance policy. 34. In the third issue, the Court is called upon to determine whether the Defendant is liable under Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act to satisfy the judgments and decrees arising from Keroka PMCC E099 of 2021 and Keroka PMCC E100 of 2021. It is not disputed that motor vehicle registration number KCL 915D was insured by the Defendant under Policy Number MPI/CH/POL/109114 at the time of the accident giving rise to the present proceedings. 35. It is equally undisputed that judgments and decrees were entered against the Plaintiff in Keroka PMCC E099 of 2021 and Keroka PMCC E100 of 2021 and that statutory notices were served upon the Defendant pursuant to Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act. 36. The Defendant admitted through DW1 that it settled some claims arising from the same accident but declined to honour the remaining claims after investigations allegedly revealed breach of the insurance policy. 37. The Plaintiff and the Interested Parties submitted that the Defendant remained bound by the statutory obligation imposed under Section 10(1) of the Insurance (Motor Vehicles Third Party Risks) Act since no declaratory proceedings had been instituted under Section 10(4) of the Act seeking avoidance of liability under the policy. 38. In a persuasive decision in **Philip Kimani Gikonyo v Gateway Insurance Co. Ltd [2007] eKLR**, the High Court held that once judgment is entered against an insured person and the insurer has been duly notified through statutory notice, the insurer becomes statutorily obligated to satisfy the decree unless liability has been lawfully avoided under the Act. Similarly, **in Blue Shield Insurance Company Limited v Joseph Mboya Oguttu [2009] eKLR**, the Court of Appeal emphasized that the purpose of Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act is to protect innocent third parties who suffer injury through the use of insured motor vehicles and that insurers cannot evade statutory liability outside the procedure expressly provided under the Act. The Court of Appeal **in Gitonga v Cannon Assurance Limited [2026] KECA 93 (KLR)** further reaffirmed that an insurer who fails to institute proceedings contemplated under Section 10(4) of the Act remains bound to satisfy judgments arising from the insured risk. 39. In the present matter, it is not disputed that the Defendant insured motor vehicle registration number KCL 915D at the material time, received statutory notices relating to the primary suits and that judgments and decrees were subsequently entered against the Plaintiff in Keroka PMCC No. E099 of 2021 and Keroka PMCC No. E100 of 2021. The Defendant also admitted that it settled some claims arising from the same accident but did not institute declaratory proceedings seeking avoidance of liability under Section 10(4) of the Act. 40. In the circumstances, and having already found that breach of the insurance policy was not proved, the Court finds that the Defendant remains liable under Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act to satisfy the judgments and decrees arising from Keroka PMCC No. E099 of 2021 and Keroka PMCC No. E100 of 2021. 41. In the fourth issue, the Court is called upon to determine whether the Interested Parties’ Cross-Claim is incompetent, premature and/or res judicata. The Defendant contended that the Interested Parties’ Cross-Claim was incompetent, premature and res judicata by reason of the decisions rendered in Milimani MCCC E3954 of 2023 and Milimani MCCC E3960 of 2023. 42. The Interested Parties submitted that the present proceedings concern the Defendant’s statutory obligations under Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act together with the legality of the Defendant’s purported repudiation of liability, issues which were not determined in the Milimani suits relied upon by the Defendant. 43. The doctrine of res judicata is codified under Section 7 of the Civil Procedure Act. In **Independent Electoral and Boundaries Commission v Maina Kiai & 5 Others [2017] eKLR**, the Court of Appeal outlined the ingredients necessary to establish res judicata including identity of parties, issues and subject matter. Similarly, in **John Florence Maritime Services Limited & Another v Cabinet Secretary for Transport and Infrastructure & 3 Others [2021] eKLR**, the Supreme Court emphasized that the doctrine should not be applied mechanically and that Courts must carefully ascertain whether the issues in dispute were directly and substantially in issue in the previous proceedings. 44. The Defendant did not place before the Court sufficient material demonstrating that the issues arising in the present proceedings were directly and substantially in issue in the Milimani suits relied upon. The present proceedings principally concern the Defendant’s statutory obligations under Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act and the legality of the purported repudiation of liability under the insurance policy. 45. Consequently, this Court is not persuaded that the Interested Parties’ Cross-Claim is incompetent, premature or barred by the doctrine of *res judicata.* 46. In the fifth issue, the Court is called upon to determine who should bear the costs of the suit and Cross-Claim. Section 27(1) of the Civil Procedure Act provides that costs follow the event unless the Court for good reason orders otherwise. In **Supermarine Handling Services Ltd v Kenya Revenue Authority [2010] eKLR**, the Court of Appeal observed that the successful party should ordinarily be awarded costs unless there exists sufficient cause to deprive such party of the same. 47. In this matter, the Plaintiff and the Interested Parties have substantially succeeded in their respective claims and Cross-Claim against the Defendant and no sufficient reason has been advanced to warrant departure from the general principle on costs. 48. Consequently, the Plaintiff and the Interested Parties are entitled to costs of the suit and Cross-Claim respectively. 49. Flowing from the foregoing analysis, judgment is hereby entered in favour of the Plaintiff and the Interested Parties against the Defendant in the following terms: 1. **A declaration be and is hereby issued that the Defendant, The Kenyan Alliance Insurance Company Limited, is liable to indemnify the Plaintiff against liabilities arising from the accident involving motor vehicle registration number KCL 915D Toyota Axio which occurred on 11th December 2020.** 2. **A declaration be and is hereby issued pursuant to Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act that the Defendant is bound to honour and satisfy the Amended Decree issued in Principal Magistrates Court at Keroka, E099 of 2021, Margaret Wangeci Sancha versus Neddy Oeri and Charles Ngotho Ndungu for general damages in the sum of KES. 1,576,848.31 and the sum of KES. 104,072.00 as costs thus making a total of KES. 1,680,920.31 together with interest at court rates until payment in full.** 3. **A declaration be and is hereby issued pursuant to Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act that the Defendant is bound to honour and satisfy the Amended Decree issued in Principal Magistrates Court at Keroka, E100 of 2021, Hezborne Kengara Mikuro versus Neddy Oeri and Charles Ngotho Ndungu for general damages in the sum of KES. 1,078,417.64 and costs at KES. 104,072.00 together with interest at court rates from 29th November 2024 until payment in full.** 4. **The Plaintiff and the Interested Parties shall have the costs of this suit and the Cross-Claim together with interest thereon at court rates from the date of judgment until payment in full**.Top of Form Bottom of Form **DELIVERED AT NYAMIRA THIS 28th DAY OF May 2026**  **WAMAE.T. W. CHERERE** **JUDGE** **Appearances** **Court Assistant - Hilda** **For Plaintiff - Mr. Kamau for. Warui & Irungu Co. Advocates** **For Defendant - Mr. Mutua for G. Mutua Molo & Company Advocates** **For Interested Parties - Mr. Mwangi for MK Mwangi Advocates LLP**