Ignazio Messina and C.s.p.a. v Stallion Insurance Company Ltd
The bottom line
#Kenya's Court of Appeal refused to force an insurer under statutory management to pay security for costs, confirming statutory management is not liquidation.
What this practically means
#Executive summary
#Key legal issues
#Whether placement of the respondent insurer under statutory management justified an order for security for costs
No. Statutory management under section 67C of the Insurance Act is a temporary measure of up to twelve months, extendable only by the High Court, during which the manager reports on whether the insurer can be revived or should be liquidated; it does not amount to liquidation.
The court examined the statutory scheme and held that the manager must report on the insurer's financial position and recommend revival or liquidation. Until that report, no one can say with certainty whether the insurer will be revived or liquidated, so mere cessation of trading during statutory management is not a good enough reason to order security for costs.
Whether the adequacy of security already provided for stay of execution in the superior court bore on the application
Yes. The respondent had provided insurance bonds of Shs 22,000,000 from five insurance companies, which the Commissioner of Assize found adequate (approximately half the decretal amount), rendering the applicant's apprehension misplaced.
The court noted that stay of execution had been granted on terms and bonds issued by Intra Africa, Concord, Lakestar, Inveco and Gateway Insurance Co Ltd. Since the Commissioner had already found this security sufficient, the applicant's fear that the respondent could not satisfy the decree and costs was misplaced and could not justify further security.
Legal principles established
#- Statutory management of an insurer under section 67C of the Insurance Act is not liquidation, and uncertainty about an insurer's fate during statutory management is not a sufficient ground to order security for costs against it
- A court will not order security for costs where its effect would be to make it difficult or impossible for a party to prosecute its appeal
Court orders
#- 1.Application for security for costs dismissed with costs
- On appeal from
- High Court (Commissioner of Assize)
- HCCC No. 216 of 2000
- Jurisdiction invoked
- Rule 104(3) of the Court of Appeal Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ignazio Messina and C.s.p.a. v Stallion Insurance Company Ltd", Case Analysis (2001). Civil Appeal No. 18 of 2001 (application under rule 104(3)). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2001/128/eng@2001-08-15
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.