A Kenya Power worker inspects a power line. FILE PHOTO | NMG
Summary
- The utility firm argued that the people insured should have instituted the case and not the insurer.
- According to Kenya Power, it had no contractual relationship with the insurance company or owe it a duty of care.
- The electricity distributor also faulted the award of damages by the High Court saying the judge did not scrutinise documents tendered before him.
Kenya Power got a reprieve after it was
spared the burden of paying Sh71.5 million to an insurance firm
following a fire incident that occured in Malindi nine years ago.
The
utility firm succeeded in an appeal against a High Court judgment
directing it to pay African Merchant Assurance Company Ltd (Amaco) the
amount being total loss incurred as a result of a fire which razed
several premises in Malindi.
Court of Appeal judges
Alnashir Visram, Wanjiru Karanja and Martha Koome said the appeal by
Kenya Power had merit and set aside the judgment by Justice Said
Chitembwe in favour of the insurance company.
“The
respondent (Amaco) lacked the locus standi to institute the suit before
the trial court,” said the three judge appellate bench.
"Negligence"
According to
Amaco, the totality of evidence on record established negligence on the
part of Kenya Power hence there was no reason to interfere with the
decision of the High Court.
On June 21, 2009, fire
broke out at Kibokoni area in Malindi where it razed down several
premises resulting in a number of policy holders who had insured their
property with the insurance company to make claims for indemnification.
The
insurer in turn engaged the services of investigators and loss
adjusters to assist in investigation and quantification of the claims.
The
company, the court heard, paid Sh76.7 million in claims together with
services of the investigators and loss adjusters’ aggregating to Sh5.5
million.
Convinced the fire was as a result of Kenya
Power’s negligence, the insurance company filed the suit seeking
reimbursement of a total of Sh82.2 million.
"No relationship"
However,
the State firm had challenged the competency of the suit at the High
Court arguing that it was the people insured who were supposed to
institute the case and not the insurance company.
According
to Kenya Power, it had no contractual relationship with the insurance
company or owe it a duty of care, saying the contract of electricity
supply was between itself and those who were insured by Amaco.
The
electricity distributor also faulted the award of damages by the High
Court saying the judge did not scrutinise documents tendered before him.
Kenya
Power further argued that had the judge scrutinised the documents, he
would have noticed there were discrepancies with regard to policy
documents or payment discharge vouchers produced by the insurance
company.
In the red
Amaco reported a Sh11.7 million net loss for the year ended December 31, 2017, the second unprofitable year in a row.
It made a net loss of Sh34.78 million in 2016.
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