https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/10153

Strafield Contractors Ltd v Directline Assurance Company Ltd & another (Civil Suit E056 of 2025) [2026] KEHC 10153 (KLR) (7 July 2026) (Ruling) Neutral citation: [2026] KEHC 10153 (KLR) Republic of Kenya In the High Court at Nakuru Civil Suit E056 of 2025 JK Sergon, J July 7, 2026 Between Strafield Contractors Limited Plaintiff and Directline Assurance Company Limited Respondent and Joseph Muingai Kamau (Suing as the Personal Representative of the Estate of Eliud Kamau Karanja - Deceased) Interested Party Ruling 1.Before this Court for determination is the Plaintiff/Applicant's Notice of Motion dated 23rd October 2025, brought under Sections 1A, 1B, 3A and 63(e) of the Civil Procedure Act, Order 51 Rule 1, Order 22 Rule 22(1) of the Civil Procedure Rules, 2010, Article 50 of the Constitution of Kenya, and all other enabling provisions of the law. 2.The Applicant seeks the following orders;i.Spent.ii.Spent.iii.Spent.iv.That pending the hearing and determination of the main suit this Honourable court be pleased to stay further execution and proceedings in Molo CMCC E212 of 2023.v.Spent.vi.That costs of this application be awarded to the Plaintiff/Applicant. 3.The background facts as presented by the Applicant are that the Applicant, Strafield Contractors Limited, is the lawful owner of motor vehicle registration number KBN 950V.The said motor vehicle was insured by the Defendant, Directline Assurance Company Limited, under policy number 040/080/1/021351/2017/TPO. 4.On 5th March 2023, the motor vehicle was involved in an accident resulting in the death of Eliud Kamau Karanja. The Interested Party, Joseph Muingai Kamau, as personal representative of the deceased's estate, instituted Molo CMCC Number E212 of 2023 against the applicant for compensation. 5.Judgment was entered against the applicant in the lower court. Despite demand, the defendant failed to settle the judgment debt, leading to the attachment of the Applicant's motor vehicle by Sanjomu Auctioneers. The applicant contends that the defendant's failure to settle the claim constitutes a breach of the insurance contract and statutory obligation under Section 10(1) of the Insurance (Motor Vehicles Third Party Risks) Act, Cap 405. 6.The present suit is a declaratory suit filed by the Plaintiff against the Defendant, seeking a declaration that the Defendant is liable to satisfy the judgment entered against the Plaintiff in Molo CMCC E212 of 2023. 7.The application is supported by the supporting affidavit of Robert Gitahi, a Director of the applicant, sworn on 23rd October 2025, and the applicant's written submissions dated 24th November 2025. The applicant's case is anchored on the grounds that the applicant held a valid insurance policy with the defendant at the time of the accident, the defendant is statutorily obligated under Section 10(1) of Cap 405 to satisfy the judgment obtained against the applicant, the defendant's refusal to settle the claim is in breach of the insurance contract, the applicant's motor vehicle which is a tool of trade has been attached and is at risk of being sold, the applicant will suffer irreparable loss and substantial injustice if the stay is not granted and the vehicle not released, and the applicant has demonstrated diligence and good faith by filing the application promptly and complying with the court's earlier conditions. 8.Learned Counsel for the applicant, M/s N. Ikua & Company, submitted that the application meets the threshold for grant of stay of execution under Order 22 Rule 22(1) of the Civil Procedure Rules. Counsel relied on the case of Butt v Rent Restriction Tribunal [1982] KLR 417, where the Court of Appeal set out the principles for granting stay including that the court's discretion must be exercised in such a way as not to prevent the court from doing justice, and that stay should be granted if there are good grounds unless there is an overwhelming hindrance. 9.Counsel further relied on Kenya Shell Ltd v Benjamin Karuga Kibiru & Another [1986] KLR 410, where it was held that substantial loss is the cornerstone for granting stay and mere inconvenience is not enough. On the issue of release of the motor vehicle, Counsel submitted that the vehicle is a tool of trade and essential for the Applicant's livelihood, relying on Equity Bank Limited v Taiga Adams Company Limited [2006] KEHC 860 (KLR) , where the court held that execution should not be oppressive or punitive and that the applicant must demonstrate substantial loss. 10.Counsel further submitted that the defendant is statutorily bound to satisfy the judgment under Section 10(1) of Cap 405, citing Kenya Orient Insurance Company Limited v Mutua & another (Civil Appeal E102 of 2020) [2024] KEHC 9259 (KLR) where the court held that insurers cannot evade liability where a valid policy exists, and Blueshield Insurance Co. Ltd v Raymond Buuri M'rimberia [1998] KECA 280 (KLR) where the Court of Appeal held that once judgment is entered, the insurer's obligation to satisfy it is statutory and not optional, notwithstanding that the insurer may be entitled to avoid or cancel the policy. 11.Counsel also submitted that the applicant's right to property under Article 40 of the Constitution is at risk, and the continued detention of the motor vehicle without considering the insurer's statutory duty undermines this constitutional protection. Finally, Counsel urged the court to find that the application is merited and allow the same as prayed. 12.At the time of writing this ruling, the defendant had not filed any response or submissions despite being served. The Interested Party, Joseph Muingai Kamau, also did neither file any response nor written submissions. This Court has therefore considered the application based solely on the applicant's pleadings, the applicant's written submissions, as well as the applicable law. 13.This court notes that from the submissions, the applicant prays for the release of the motorvehicle registration no. KBN 950V.This is not a substantive prayer in the application and is therefore marked as spent. 14.The following issues thus arise for determination;i.Whether the Applicant has satisfied the conditions for grant of stay of execution pending the hearing and determination of the declaratory suit.ii.Who should bear the costs of the Application. 15.Order 22 Rule 22(1) of the Civil Procedure Rules provides; that where an application for stay of execution of a decree or order is made to the court, the court may order stay of execution upon such terms as to security or otherwise as it thinks fit, pending the hearing of the application or until the court otherwise orders. 16.The applicant has filed this declaratory suit seeking a declaration that the defendant is liable to satisfy the judgment entered against the Applicant in Molo CMCC E212 of 2023. The application before this Court seeks stay of further execution and stay of lower court proceedings pending the hearing and determination of this declaratory suit. 17.The principles guiding the grant of stay of execution are well settled. In Butt v Rent Restriction Tribunal [1982] KLR 417, the Court of Appeal held that the power of the court to grant or refuse an application for a stay of execution is a discretionary power which should be exercised in such a way as not to prevent the Court from doing justice. The court further held that the general principle in granting or refusing a stay is that if there is no other overwhelming hindrance, a stay must be granted so that the substratum of the suit may not be rendered nugatory should the court eventually find in favour of the applicant. 18.In the present case, the applicant has demonstrated that it stands to suffer substantial loss as its motor vehicle, which is a tool of trade for its construction business, has been attached. The vehicle is essential for the applicant's livelihood and business operations and its sale would cause irreparable harm to the applicant. The application was filed promptly upon attachment, demonstrating diligence and good faith on the part of the applicant. The applicant has also complied with the court's earlier conditions, including the deposit of Kshs 500,000/- as security. If execution is allowed to proceed and the applicant's vehicle is sold, the declaratory suit would be rendered nugatory even if the applicant succeeds in establishing the defendant's liability. 19.The applicant has demonstrated that it has a valid insurance policy with the defendant. To allow execution to proceed against the applicant would be a grave injustice, particularly where the applicant has filed this declaratory suit to compel the defendant to fulfill its statutory obligation. Therefore, I find that the applicant has satisfied the conditions for grant of stay of execution pending the hearing and determination of the declaratory suit under Order 22 Rule 22(1) and the Application is merited. 20.The applicant has already deposited Kshs 500,000/- as security, demonstrating commitment to the proceedings and providing protection to the Interested Party and the defendant. 21.In light of the foregoing, the Applicant's Notice of Motion dated 23rd October 2025 is found to be meritorious giving rise to the issuance of the following orders;a.That an order is hereby issued staying further execution and proceedings in Molo CMCC E212 of 2023 pending the hearing and determination of this suit.b.That the applicant's Kshs 500,000/- already deposited in court shall continue to be held as security pending the hearing and determination of the declaratory suit.c.That the costs of this application shall be in cause. DATED, SIGNED AND DELIVERED AT NAKURU THIS 7TH DAY OF JULY, 2026.J. K. SERGONJUDGEIn presence of:C/A Jamleck/RutohMiss Kimure for the plaintiff