Nabwire & another v Directline Assurance Company Limited (Civil Case E420 of 2024) [2026] KEMC 76 (KLR)
The bottom line
#A Kenyan court forced Directline Assurance to pay Kshs. 3 million for skipping legal deadlines, but accident victims must chase the insured driver for the remaining balance.
What this practically means
#Executive summary
#Key legal issues
#Whether the Defendant was the insurer of motor vehicle KCH 587W and bound by the judgment in the primary suit
Yes - the Defendant insured the vehicle with Joel Ndunda Kimilu as policyholder, and having failed to seek a Section 10(4) declaration or set aside the judgment, is bound to satisfy it up to the statutory cap.
DW1 admitted the policy was issued for KCH 587W to Joel Ndunda Kimilu, and that Kimilu, the Defendant's insured, was joined as third party and found 100% liable. The insurer neither sought a declaration under Section 10(4) within the three-month window nor moved to set aside the primary judgment. Under Section 10(1), an insurer must pay judgment sums notwithstanding grounds to avoid or cancel the policy, so the defenses raised were unavailable.
Whether statutory notice was duly served
Yes - notice was served on 13th December 2019 and any notice sufficiently outlining the claim suffices.
The court adopted the liberal approach in Philip Kimani Gikonyo v Gateway Insurance, that the form of notice does not matter so long as it alerts the insurer of a potential claim so it can protect its interests. A police abstract was also held sufficient proof of the insurer per Kenya Alliance Insurance v Apopa. The statutory notice was issued before the primary suit was filed.
The extent of the Defendant's liability in light of the statutory cap
Liability limited to Kshs. 3,000,000.00; the excess is recoverable from the insured.
Section 5(b)(iv) of Cap 405 caps insurer liability at Kshs. 3,000,000.00 per incident, and DW1 confirmed the policy limit. The Court of Appeal in Kiruku v Kenya Orient and the High Court in Kenya Orient v Omagwa both confirm courts cannot compel an insurer to pay beyond the prescribed statutory amount; excess compensation is recoverable from the insured directly.
Legal principles established
#- An insurer that fails to seek a declaration under Section 10(4) of Cap 405 within the statutory three-month window, or to set aside the judgment, is barred from raising policy defenses later.
- An insurer's liability is capped at Kshs. 3,000,000.00; any award in excess is recoverable from the insured, not the insurer.
- Any notice, howsoever given, that sufficiently outlines the event giving rise to a claim is good notice under the Act.
Court orders
#- 1.A declaration that the Defendant is liable to satisfy the judgment and decree in Machakos CMCC No. 94 of 2020 up to the statutory limit of Kshs. 3,000,000.00
- 2.The Defendant to pay the Plaintiffs Kshs. 3,000,000.00 with interest at court rates from 11th September 2024 until full payment
- 3.The Plaintiffs may pursue the balance of the decretal sum from the insured, Joel Ndunda Kimilu
- 4.The Defendant shall bear the costs of this suit
- 5.A 30-day stay of execution
- Jurisdiction invoked
- Original declaratory jurisdiction under Section 10 of the Insurance (Motor Vehicle Third Party Risks) Act, Cap 405
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Nabwire & another v Directline Assurance Company Limited (Civil Case E420 of 2024) [2026] KEMC 76 (KLR)", Case Analysis (2026). Civil Case No E420 of 2024. Source: https://new.kenyalaw.org/akn/ke/judgment/kemc/2026/76/eng@2026-02-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.