Republic v Charles Lutta Kasamani t/a Kasamani & Company Advocates [2005] KECA 306 (KLR)
The bottom line
#Kenya's Court of Appeal halted orders to liquidate United Insurance, ruling the regulator must follow the law's step-by-step process before winding up any insurer.
What this practically means
#Executive summary
#Key legal issues
#Statutory power to commence liquidation of an insurer
On a prima facie reading of sections 67C(2), (6), (7) and (8) and section 123 of the Insurance Act, neither the Minister nor the Commissioner of Insurance may straightaway commence liquidation of an insurer; a manager must first be appointed, whose report informs the Commissioner's recommendations to the Minister, who retains a discretion.
The Commissioner has a discretion whether or not to appoint a manager, and it is the manager who recommends revival or liquidation. The Commissioner may then only make recommendations to the Minister, whose decision need not comply with those recommendations. Section 67C(8) gives the Minister a discretion to decide on liquidation. These are arguable points warranting stay.
Limits of mandamus over statutory discretion
Citing Kenya National Examinations Council v Gathenji, the court doubted that mandamus can compel an official to exercise a statutory discretion in a particular manner.
The discretion to appoint a manager is bestowed on the Commissioner, not the court, and authority suggests the court has no power to compel its exercise in a particular manner. Counsel for the respondent conceded these were arguable points, and the court found them weighty issues of law for the intended appeal.
Nugatory value test for stay
The appeal would be rendered nugatory without stay because commencing winding-up proceedings is a grave step the insurance company might not recover from, and the manager's possible recommendation of revival could be rendered nugatory.
The judge's order required the applicants to commence, prosecute and conclude winding-up proceedings, a grave and effectively irreversible step. A manager had already been appointed who might recommend revival; executing the order would pre-empt that statutory process. Stay was therefore granted pending determination of the appeal.
Legal principles established
#- A court cannot, by an order of mandamus, compel the Commissioner of Insurance to exercise in a particular manner a discretion bestowed on him by statute, and neither the Minister nor the Commissioner may straightaway commence liquidation of an insurer without the statutory manager process under section 67C.
Court orders
#- 1.The notice of motion dated 9th August 2005 is allowed
- 2.The orders of the superior court made on 29th July 2005 are stayed until the appeal shall have been filed, heard and determined or until further orders of the Court
- 3.The costs of the motion shall be in the intended appeal
- On appeal from
- High Court of Kenya at Kisumu
- Misc. Civil Application No. 125 of 2005
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules (application for stay pending appeal); appeal against judicial review orders of the High Court
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (4)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Patrick Mwangi Weru v Republic [2013] KECA 297 (KLR)[2013] KECA 297 (KLR)25 Jul 2013applied
- Bernard Wachira Kamonye v Republic [2008] KECA 155 (KLR)[2008] KECA 155 (KLR)4 Jul 2008followed
- Robert Simiyu Khaemba v Republic [2008] KECA 308 (KLR)[2008] KECA 308 (KLR)22 Feb 2008followed
- FRANCIS MACHARIA GICHANGI & 3 others v REPUBLIC [2007] KECA 490 (KLR)[2007] KECA 490 (KLR)6 Jul 2007
Cite this brief
#Cite this brief
Caselaw, "Republic v Charles Lutta Kasamani t/a Kasamani & Company Advocates [2005] KECA 306 (KLR)", Case Analysis (2005). Civil Application NAI 243 of 2005 (UR. 147/2005). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2005/306/eng@2005-10-07
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.