African Merchant Assurance Co. Ltd (Amaco) suffered a blow in court after it was ordered to pay Kenya Power Company, Ksh14 Million.
The Ksh14 Million to be paid to Kenya Power is in relation to damages in costs incurred in a case that involved a Ksh71 Million fire loss claim.
The ruling was delivered by justice Reuben Nyakundi, with the court upholding the decision of a magistrate to cap the bill of costs at Ksh14,660,987.
Amaco which is associated with Deputy President William Ruto moved to court in 2012 after a fire incident at Kibaoni area in Malindi, where several properties were damaged.
The investigations revealed that the fire was caused by a faulty electrical pole and that Kenya Power, was legally responsible for the fire.
Amaco settled the eight insured affected parties’ claims amounting to Ksh 76,708,415 and the cost of investigators and loss adjusters amounting to Ksh 5,544,799.
The insurance company sought Ksh 82,253,214 in the form of special damages plus interest and costs against the power distributor.
In their defence, Kenya Power opposed the claim disputing the cause of the fire and further maintained, that no negligence on its part, had been proved to the required standard.
Back in March 2016, the High Court in its Judgment found that the fire was caused by the electrical sparks from the electrical pole and that Amaco had proved that Kenya Power was negligent hence 100% liable.
The Court ordered Kenya Power to pay Amaco Ksh71, 527,412 which was the total amount incurred as a result of the fire.
The national power distributor challenged the decision in the Court of Appeal noting that the High Court judge had erred in his verdict.
The Court of Appeal found in favour of Kenya Powers claims and set aside the High Court Judgment and subsequently struck out the suit with costs.
Aggrieved by the ruling, Amaco moved to the Supreme Court claiming that the ruling will occasion huge loses in the insurance industry.
Amaco was then ordered to pay Kenya Power Ksh14M in legal fees damages.