Old Mutual General Insurance Kenya Ltd v Magothe & 3 others (Commercial Civil Suit E001 of 2024) [2026] KEHC 11434 (KLR) (24 July 2026) (Ruling)

**REPUBLIC OF KENYA** **IN THE HIGH COURT AT MAKUENI** **COMMERCIAL CIVIL SUIT NO. E001 OF 2024** **OLD MUTUAL GENERAL** **INSURANCE KENYA LTD……………………..PLAINTIFF/APPLICANT** **-VERSUS-** **PATRICK WERU MAGOTHE ……………DEFENDANT/RESPONDENT** **AND** **JOSEPH MACHARIA NJUGENA………..……1ST NTERESTED PARTY** **ABDULKARIM BASHIR……………………..2ND INTERESTED PARTY** **PAUL NJOROGE IRUNGU……………..…..3RD INTERESTED PARTY** **RULING** **The Application** 1. Before me is the application dated 08/04/2025 brought under Order 51 Rule 1 of the Civil Procedure Rules 2010, Section 3A of the Civil Procedure Act, Section 10(4) of the Insurance (Motor Vehicle Third Party Risks) Act, Cap 405 Laws of Kenya and all other enabling provisions of the law. It seeks the following orders; 2. Spent. 3. **THAT** there be stay of proceedings in Milimani CMCC No. E1020 of 2025: **Paul Njoroge Irungu -vs- Old Mutual General Insurance Co. Ltd** pending the hearing and determination of the instant application. 4. **THAT** there be stay of proceedings in **Milimani CMCC No. E1020 of 2025: Paul Njoroge Irungu -vs- Old Mutual General Insurance Co. Ltd** pending the hearing and determination of the suit filed herein. 5. **THAT** the costs of this application be provided for. 6. The application is supported by the grounds on its face and the Affidavit of Cheryl Odipo sworn on 15/04/2025. She deponed that she was the Legal Officer M/S Old Mutual Insurance Company Ltd and duly authorized by the Company’s Board to swear the affidavit. 7. That, the suits before the subordinate court; **Kilungu CMCC No. E341 of 2023; Paul Njore Rungu -vs- Patrick Weru Magothe & Lenny Weru, Kilungu CMCC No. E353 of 2023; Joseph Macharia Irungu -vs- Patrick Weru Magothe & Lenny Weru and Kilungu CMCC No. E359 of 2023; Abdulkarim Bashir -vs- Patrick Weru Magothe & Lenny Weru** are compensatory claims for damages arising from an accident that occurred on 24/08/2023 involving motor vehicle registration No. KDJ 160Z*.* 8. That, the vehicle was the subject matter of a motor Commercial *(Own Goods Policy)* under policy number 07008010171362022. That, consequently, the Plaintiffs’ claims for compensation in the suits are inadmissible as per the terms of the Defendant’s policy which does not extend to/and or cover liability in respect of death or bodily injury to any person in the event where the insured offended and/or breached the terms and conditions provided for the policy agreement. 9. That, **Kilungu CMCC No. E341 of 2023** has proceeded and judgment entered on 19/12/2024 and the Plaintiff therein has proceeded to file the declaratory suit herein i.e., **Milimani CMCC No. E1020 of 2025: Paul Njore Irungu -vs- Old Mutual General Insurance Co. Ltd** as per the copy of Plaint annexed herewith as EX 1.. 10. That, the orders sought in this application will undoubtedly have a direct impact on the suits in the subordinate court and any other suit which may be filed subsequently on the same cause of action. That, if the declaratory suit is not stayed, the application herein and the suit could be rendered an academic exercise. **The Response** 1. The application is opposed through the Replying Affidavit of Kisiang’ani Eddah sworn on 08/05/2025. She deponed that she was an Advocate of the High Court of Kenya in conduct of the matter on behalf of the 3rd Interested Party. 2. That, the application is purely an afterthought having been provoked by the declaratory suit and there is no provision in law for grant of stay of proceedings pending obtaining of declaratory order to avoid liability against an insured. 3. That, the law requires an Applicant to move court within 3 months of commencement of a suit against its insured to obtain a declaration to avoid liability. That, the application is therefore time barred. Copies of the Statutory Notice & Receipt on the suit are exhibited as **EK1 & 2** respectively. 4. That, stay of proceedings is a serious, grave and fundamental interruption of the right that a party has to conduct his litigation and the Applicant has failed to demonstrate beyond reasonable doubt that proceedings in the declaratory suit ought not to be allowed to continue. 5. The application was canvassed through written submissions. **The Applicant’s Submissions** 1. It was submitted that the effect of not granting a stay of the declaratory suit is that the Applicant will be left vulnerable to execution and there is a risk that the Milimani court may give an opinion contrary to the decision of this court. 2. Reliance was placed on **Corporate Insurance Co. Ltd. -vs-Charles John Musee [2014] eKLR** for the submission that the suit herein, being a disclaimer suit, has an effect similar to a review proceeding. 3. Further reliance was placed on **Britam General Insurance Company (Kenya) Ltd -vs- Stephen Wambua Masila & 11 Others [2020] KEHC 8535 (KLR)** for the submission that the declaratory suit should be stayed because the Applicant’s liability was dependent on the outcome of the suit herein. 4. With regard to costs, the Applicant acknowledged that award of costs is within the court’s discretion and that the Applicant has demonstrated that it is entitled to the same. **Submissions by the 3rd Interested Party** 1. It was submitted that before this court can interrupt proceedings, it has to be definitively established that there exists an exceptional circumstance for doing so. Reliance was placed on **Kenya Power & Lighting Company Limited -vs- Esther Wanjiru Wokabi [2014] eKLR** where the court stated; *“…the courts discretion in deciding whether or not to grant stay of proceedings as sought in this application must be guided by any of the following three main principles;* *a) Whether the applicant has established that he/she has a prima facie arguable case.* *b) Whether the application was filed expeditiously and* *c) Whether the applicant has established sufficient cause to the satisfaction of the court that it is in the interest of justice to grant the orders sought.”* 1. It was submitted that the declaratory suit is time barred as it was filed outside the 3 months statutory limit stipulated by section 10(4) of the Insurance (Motor Vehicle Third Party Risks) Act. Further, it was submitted that there is no evidence that a notice of repudiation was issued to the Defendants or Interested Parties after14 days as envisaged by the said provision. Reliance was placed, *inter alia*, on **Britam General Insurance Co (Kenya) Limited -vs- Josephat Ondieki (2018) eKLR** where the court stated; *“…to me the contract issue is whether on assessment of the claim brought by the plaintiff the suit is statute barred. The written law of governing this contract of insurance is found in the Act…* *…As I have already stated the defendant and third parties filed suit referenced as CMCC No. 625 of 2015 on 15th December, 2015. There is no evidence that the plaintiff made an application before the respective court for stay of proceedings for leave to file this declaratory suit. It is in this suit the plaintiff seeks to repudiate the claim. The conditions for commencement of a declaratory suit are time bound as stipulated in Section 10(4) of the Act.”* 1. It was submitted that from the nature of the prayers sought, the Interested Parties are not privy to the dispute between the Plaintiff and Defendant (insured) and that the prayers sought in this suit are different from those in the declaratory suit. 2. I have carefully considered the application, the response and rival submissions, and the issue for determination is whether the application is merited; **Analysis & Determination** 1. The Milimani case -CMCC No. E1020 of 2025: Paul Njoroge Irungu -vs- Old Mutual General Insurance Co. Ltd- is a declaratory suit seeking to enforce the award which was given in Kilungu CMCC No. E341 of 2023 2. It is contended that the declaratory suit is statute barred for having been filed outside the 3 months statutory limit stipulated by **Section 10(4) of the Insurance (Motor Vehicle Third Party Risks) Act**. The said section provides; *“No sum shall be payable by an insurer under the foregoing provisions of this section if* ***in an action commenced before****, or* ***within three months after****, the commencement of the proceedings in which the judgment was given,* *he has obtained a declaration that, apart from any provision contained in the policy he is entitled to avoid it on the ground that it was obtained by the non-disclosure of a material fact, or by a representation of fact which was false in some material particular, or, if he has avoided the policy on that ground, that he was entitled so to do apart from any provision contained in it:* *Provided that an insurer who has obtained such a declaration as aforesaid in an action shall not thereby become entitled to the benefit of this subsection as respects any judgment obtained in proceedings commenced before the commencement of that action, unless before or within fourteen days after the commencement of that action he has given notice thereof to the person who is the plaintiff in the said proceedings specifying the non-disclosure or false representation on which he proposes to rely, and any person to whom notice of such action is so given shall be entitled, if he thinks fit, to be made a party thereto”.* 1. From the foregoing provision of the law, it is evident that ***No sum shall be payable by an insurer*** *to settle a judgment where the insurer has* 1. ***in an action commenced before*** *the commencement of the proceedings in which the judgment was given he has obtained a declaration that he is entitled to avoid it and before or within fourteen days after the commencement of that action he has given notice of the action the plaintiff in the said proceedings specifying the non-disclosure or false representation on which he proposes to rely* *or* * 1. ***in an action commenced within three months after*** *the commencement of the proceedings in which the judgment was given he has obtained a declaration that he is entitled to avoid it* 1. In other words, ***a***n insurer has an obligation to file suit to avoid the policy before a suit for compensation is filed; or within three months of the filing of the suit seeking such compensation; and to notify the claimant in the said proceedings / suits of the ground upon which it seeks to avoid liability where the suit to avoid liability was commenced before commencement of the suit seeking compensation . This notice should be given before or within 14 days after commencement of the suit to avoid liability. 2. It is evident that this matter turns on time. Time is of the essence in these matters an is couched in mandatory terms. 3. The primary suit herein was filed on **04/12/2023** and a statutory notice duly served upon the Insurer on **08/12/2023** as can be seen from annexures EK 1(a)& (b). The suit herein was filed on **13/03/2024**. According to **Order 50 Rule 4 of the Civil Procedure Rules**, time does not run between 21st December of any year and 13th January of the following year. The provision states; ***“4. When time does not run [Order 50, rule 4]*** *Except where otherwise directed by a judge for reasons to be recorded in writing, the period between the twenty-first day of December in any year and the thirteenth day of January in the year next following, both days included, shall be omitted from any computation of time (whether under these Rules or any order of the court) for the amending, delivering or filing of any pleading or the doing of any other act:* *Provided that this rule shall not apply to any application in respect of a temporary injunction.”* 1. Consequently, the computation of time in this case is from; 04/12/2023 – 20/12/2023 (17) and then from 14/01/2024 (18)– 13/03/2024 (29) +(13) which gives a total of seventy seven (77) days. Three months would have ended on the 26th March 2024. 2. It is therefore evident that the suit herein was filed within the stipulated three months and that the requirement to inform the 3rd interested party herein was not applicable because the suit herein was not commenced **before** the primary suit. Consequently, the suit is not statute barred. 3. As to whether the declaratory suit should be stayed, the interests of justice demand that the same be stayed because the liability of the Plaintiff/Applicant is dependent on the outcome of this suit. In **Britam General Insurance Company (Kenya) Ltd -vs- Stephen Wambua Masila & 11 Others (supra),** the court stated; *“Similarly, the Applicant herein is in imminent danger of a declaratory judgment being entered against it in respect of which its liability is conditional on the outcome of this suit. It is therefore my view that the proceedings in the said suits ought to be stayed for a specific period that would allow the applicant to prosecute this suit.”* 1. From the foregoing the applicant complied with the law. Taking into account the prejudice that the applicant will suffer if stay is not granted, it is only in order that the stay be granted. 2. Final Disposition: **An order of stay of proceedings in Milimani CMCC No. E1020 of 2025: Paul Njoroge Irungu -vs- Old Mutual General Insurance Co. Ltd be and is hereby issued pending the hearing and determination of the suit herein.** 3. **Costs of this application be in the cause,** **RULING dated, signed and delivered virtually at Eldama Ravine (Sub-Registry) this 24th July 2026.** **MUMBUA T MATHEKA** **JUDGE** **In the presence of:-** **CA Karanja** **Applicant’s Advocates** G & G Advocates LLP **Advocates for the 3rd Interested Party** Waiganjo Wachira & Co. Advocates