Gateway Insurance Co. Ltd v Catherine Ndinda [2016] KECA 280 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed insurers must pay judgments against their insured where the policy covered the injured passenger, even under statutory exceptions.
What this practically means
#Executive summary
#Key legal issues
#Scope of section 5(b) exceptions to third party cover
The exceptions in section 5(b) are permissive, not prohibitory; the insurer and insured may extend cover to excepted classes, making them third parties under the Act.
Section 5 stipulates that a valid policy need not cover persons listed under section 5(b), but the section neither obligates nor prohibits coverage of those persons. Section II of the policy covered death or bodily injury of any person, excepting only those injured in the course of employment by the insured. The vehicle was private and the deceased fell outside the policy exceptions; the parties' contract thus extended cover to him, making him a third party within the meaning of the Act.
Insurer's liability under section 10(1) once judgment is obtained against the insured
Once a valid judgment is held against the insured for a liability covered by the policy, the insurer must pay it, including costs and interest.
Section 10(1) applies where judgment is obtained for a liability covered by the terms of the policy, notwithstanding that the insurer may be entitled to avoid or cancel the policy. The respondent held an undisputed valid judgment of Kshs 852,000 against the insured for a liability covered under section II of the policy. The appellant was therefore statutorily required to satisfy that judgment, and the declaratory suit was properly decreed.
Legal principles established
#- Section 5(b) of the Insurance (Motor Vehicle Third Party Risks) Act relieves an insurer of the obligation, but does not prohibit it, from covering passengers in the vehicle; where the policy actually covers such persons they are third parties within the Act.
- Where the policy covers a liability, section 10(1) of the Act obliges the insurer to satisfy a judgment against the insured notwithstanding avoidance or cancellation of the policy.
Court orders
#- 1.Appeal dismissed with costs to the respondent.
- 2.Appellant required to satisfy the judgment obtained by the respondent against the insured under section 10(1) of the Insurance (Motor Vehicle Third Party Risks) Act.
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C. No 5806 of 1993
- Jurisdiction invoked
- First appeal to the Court of Appeal from the High Court (Insurance (Motor Vehicle Third Party Risks) Act context; appellate jurisdiction over High Court decrees)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Gateway Insurance Co. Ltd v Catherine Ndinda [2016] KECA 280 (KLR)", Case Analysis (2016). Civil Appeal No 225 of 2005. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/280/eng@2016-08-12
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.