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 #ticker:KPLC 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.
