- The company had insured the business with APA insurance and had fully paid for the policy.
- The judge noted that the Britind Industries Ltd had proved its case to the required standard.
Image: FILE
An insurance company has been ordered by the High Court to pay a manufacturing company over Sh82 million in damages in a claim dispute.
APA Insurance Limited had been sued by Britind Industries Ltd, a company that manufactures packaging and paper materials such as serviettes and toilet tissues.
In a case filed in 2016 by their lawyer John Ogada, the industry claimed that APA insurance had refused to settle its claim after a fire burned down the industry and destroyed their building, machinery and raw materials causing extensive losses to the company.
The company had insured the business with APA insurance and had fully paid for the policy.
Justice Alfred Mabeya on February 17, ruled that from the evidence on record, it was clear that the factory was exposed to structural damage with respect to the foundation and the walls. The same has to be rebuild afresh.
"The evidence provided by the plaintiff is to the court’s satisfaction that the loss was total. The finished goods were completely lost and the plant and machinery badly damaged. I also take cognisance of the fact that the defendant had relied upon its own valuers report in coming up with the policy and the amount of insurance. It cannot therefore be allowed to depart from it in ascertaining the correctness of the claim or loss suffered," he said.
The judge also noted that the Britind Industries Ltd had proved its case to the required standard. He said it demonstrated that it is entitled to the sum insured and ought to be indemnified by the defendant to that extent.
"I find merit in the claim for Sh82,333,324.78 against the defendant and enter judgment accordingly. The said sum shall attract interest at court rate from the date of the suit until payment in full," justice Mabeya ruled.
Lawyer Ogada had argued that after the fire had razed down his client’s factory, the insurance company sent an investigator, who demanded bribes from Santosh Kumar Singh, a director of Britind Industries Ltd.
The court heard when the investigator was rebuffed, he paid some of the company’s employees to support an allegation that Singh had started the fire.
That despite demand, APA refused to pay the claim alleging that the plaintiff may have caused the fire.
The lawyer contended that APA’s investigator influenced witnesses to change their statements and delayed to complete investigations.
On that basis, the plaintiff prayed for judgment against the insurance company.
The insurance company, who was represented by senior counsel Zehrabanu Janmohamed in their defence maintained that Singh had burned his factory. It further argued that the company had not disclosed to her client that his company was a tenant and not the owner of the building where he was conducting the business.
However, lawyer Ogada in his submissions said that before providing the insurance cover, APA had itself done a valuation which according to the valuation report included the building, all the machinery and products of the company and his client had paid the required premium.
In his judgment justice Mabeya said even though the allegations of bribery against the investigator George Ndegwa had been reported to them even before they declined to settle the claim, the insurance company’s witnesses agreed that they neither investigated the complaint nor did they take any action.
The court found that independent witnesses exonerated Singh from possible involvement in starting the fire.