CIC General Insurance Company Limited v Mati (Civil Appeal E708 of 2024) [2025] KEHC 13390 (KLR) (Civ) (30 September 2025) (Judgment)

Key Facts

Transaction Type

Issues

• The Court evaluates compliance with Section 10(2)(a) of the Insurance Act, which requires notice to the insurer 30 days before the primary suit. The Respondent served notice on 29 May 2019, and the Appellant was served with pleadings on 4 June 2019, satisfying the statutory requirement.
• The primary issue in the case is whether the Appellant insurer is legally obligated to settle a judgment obtained against the insured in the primary suit, specifically under Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act. The Appellant argues it was not the insurer of the Defendant in the primary suit and claims lack of contractual obligation, while the Respondent contends the Appellant failed to comply with statutory notice requirements and is estopped from denying liability.
• A key issue is whether the Appellant's insurance policy covered the Defendant in the primary suit. The Appellant asserts its insured was Charles Mugambi, not the Defendant, and claims it had no opportunity to defend the primary suit. The Court examines if this disclaimer argument holds under the Act.
• The Appellant argues it could avoid liability under Section 10(4) by challenging the policy's validity. However, the Court finds the Appellant failed to file a timely disclaimer suit or assert policy avoidance in the primary proceedings, making it estopped from denying liability.

Holdings

• The court ruled that the Appellant is estopped from denying liability as it failed to file a disclaimer suit or take action after being notified, and the insured admitted to insuring the vehicle through another party.
• The court confirmed the existence of a judgment in favor of the Respondent in the primary suit, which had not been set aside, appealed, or reviewed.
• The court found that the Respondent issued the statutory notice to the Appellant on 29th May 2019, and the primary suit was filed on 3rd June 2019, with the Appellant being served within 30 days, thus complying with Section 10(2)(a) of the Insurance Act.
• The court affirmed that the subject motor vehicle was insured by the Appellant, as the Appellant admitted to issuing an insurance cover on the offending vehicle.
• The court determined that the Respondent was covered under the policy, as discussed in the decision.

Remedies

• The appeal is wholly unsuccessful and is hereby dismissed. This is part of the court's final orders in the matter.
• The Appellant is ordered to bear the costs of the appeal. This is one of the final orders made by the court in this case.

Monetary Damages

Legal Principles

Precedent Name

• Selle & Ano. vs. Associated Motor Boat Co. Ltd
• Stephen Kiarie Chege vs. Insurance Regulatory Authority & Another
• Willy Kimutai Kitilit v Michael Kibet
• Roseline Violet Akinyi vs. Celestine Opiyo Wangwau
• Kiruga vs. Kiruga & Another
• Mwanasokoni vs. Kenya Bus Service Ltd.
• Corporate Insurance Company Ltd Vs Elias Okinyi Ofire

Key Disputed Contract Clauses

• Section 10(4) provides insurers with options to repudiate liability by filing a disclaimer suit or asserting policy avoidance due to non-disclosure or false representation. The court ruled the Appellant failed to exercise these rights timely, estopping it from denying liability.
• Section 10(2)(a) stipulates that insurers must be notified of proceedings before or within 30 days of their commencement to avoid liability. The court found the Respondent complied by serving notice on 29 May 2019, with the primary suit filed on 3 June 2019, meeting this requirement.
• Section 10(1) of the Insurance (Motor Vehicles Third Party Risks) Act requires insurers to pay sums payable under judgments against insured persons for liabilities covered by the policy, including costs and interest, subject to the Act's provisions. The court applied this to affirm the Appellant's duty to settle the primary suit judgment.

Cited Statute

• Insurance (Motor Vehicles Third Party Risks) Act
• Constitution of Kenya, 2010

Judge Name

Passage Text

• a. The appeal is wholly unsuccessful. It is hereby dismissed.
• 25. This Court further posits that the Constitution of Kenya, 2010 ushered in a transformative trajectory in the governance of the country. For instance, prior to 2010, equity was only a common law doctrine whose remedies were purely discretionary. However, the 2010 Constitution elevated equity to a constitutional principle under Article 10(2)(b). In such a scenario, even the maxims of equity were also so elevated. (See the Court of Appeal in Willy Kimutai Kitilit v Michael Kibet [2018] eKLR). In this case, the Appellant is caught up by the doctrine 'equity aids the vigilant and not the indolent'.
• 24. In the case at hand, the Appellant, upon service of the notices and the primary suit documents, did not take any action. It simply let the primary suit proceed and eventually judgment was entered and the declaratory suit filed. Therefore, the Appellant having been properly notified of the intended proceedings before the primary suit was filed and again after the filing of the primary suit and having neither filed a disclaimer suit nor having not entered a limited appearance in the primary suit and further coupled with the fact that the insured admits insuring the offending vehicle through another party and not the Defendant in the primary suit, then the insured is hereby estopped from contending that it was not bound to satisfy the judgment in the primary suit.

Damages / Relief Type

• Compensatory Damages: Kshs. 211,291 including costs and interest
• Declaratory Relief: Insurer ordered to pay the judgment amount in the primary suit