Postmaster-general Enock Kinara. He has sued Amaco Insurance. PHOTO | FILE
What you need to know:
Amaco says in court filings that the policy that Skycrapers Africaway bought for the building had expired two weeks before it collapsed, rendering its compensation claim impractical.
Dr Kinara has sued Amaco Insurance alongside First Community Bank (FCB), which wants to auction the land on which the building was to stand.
He wants to stop First Community Bank from listing it as a defaulter with the credit reference bureau.
Amaco Insurance has distanced itself from a compensation claim lodged by a firm belonging to postmaster-general Enock Kinara on a building that collapsed in Ongata Rongai.
Dr Kinara’s firm, Skycrapers Africaway Company, was the building’s contractor. Amaco says in court filings that the policy that Skycrapers Africaway bought for the building had expired two weeks before it collapsed, rendering its compensation claim impractical.
Dr Kinara has sued Amaco Insurance alongside First Community Bank (FCB), which wants to auction the land on which the building was to stand. He wants to stop First Community Bank from listing it as a defaulter with the credit reference bureau.
The postmaster-general holds in his suit that the Amaco policy should indemnify him from First Community Bank’s plan to auction the land, but the insurer has denied the claims.
“During the 12 month period commencing on August 20, 2014 and ending on August 19, 2015 Amaco never heard of any incident arising during the construction of the building as per the insurance policy. Amaco contends that it is under no obligation to indemnify Skycrapers since the policy term had expired according to their agreement,” the insurance company says.
Skycrapers says that FCB loaned it the Sh40 million through Sharia law’s Musharaka financing system which requires a lender and borrower to share profit and losses from an investment built by borrowed money.
The amount FCB provided was equivalent to 66 per cent of the project cost hence Dr Kinara’s firm wants it to take responsibility for losses of the same proportion.
FCB, however, insists that the loan was to be repaid within nine months, and that there was no clause in the agreement that profits and losses would be shared in a 66:34 ratio as Dr Kinara holds.
This, the bank says, is informed by the fact that Dr Kinara’s firm was granted a normal loan and a Sharia- compliant product. The lender further denies that the loan repayment was to be pegged on proceeds of the building.
Dr Kinara in his affidavit says that listing his firm with the CRB as a defaulter will curtail plans to have another bank take over his loan with FCB and finance a new project.
Amaco also says it can only indemnify Skycrapers for damages incurred within the one year period stipulated in the agreement with Dr Kinara’s firm. The insurer wants to be left out of the case Skycrapers filed.
“The plaintiff is aware that it should have either sought renewal of the all risk insurance policy or acquired a similar one from another insurance policy. Skycrapers therefore has no cause of action against Amaco and as such Amaco should be discharged from the suit herein,” Amaco adds.
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