UAP Insurance Company Ltd v Jamwa Consolidated Agencies (K) Ltd

time of the alleged losses; secondly, that the dispute was subject to an arbitration clause contained in the insurance contract and the suit was, therefore, improperly before the court; and lastly, that the suit was incompetent on the ground that it had been instituted without a company resolution authorizing its commencement. 4. During the hearing, Jane Njeri Mwaura the Director of the respondent testied as PW1 on its behalf and stated that the respondent had obtained a GIT insurance policy from the appellant covering the period between 1st March, 2013 and 1st March 2014, in respect of its tanker vehicles. She stated that the respondent's insurance premium was nanced through an IPF arrangement with the bank and maintained that the respondent was not in default in servicing the instalments due under that arrangement. 5. PW1 testied further that the two insured vehicles were involved in separate road trac accidents during the currency of the policy, resulting in the loss of petroleum products. That the appellant wrongfully repudiated the respondent's claim based on an alleged default communicated by the bank. She asserted that the insurance cover remained valid at the time of the accidents and the respondent was entitled to indemnity under the policy. 6. Joseph Mwai, a Senior Legal Ocer in charge of Claims at the appellant’s company, testied as DW1 and stated that the respondent's insurance premium had been paid to the appellant by the bank, pursuant to an IPF arrangement. However, the appellant subsequently received a letter dated 24th October, 2013 from the bank notifying it that the respondent had defaulted in repaying the nanced premium. According to DW1, the appellant was obligated to reimburse the bank for the outstanding amount under the nancing arrangement. On that basis, the appellant treated the insurance cover as invalid, and repudiated the respondent's claim arising from the two road trac accidents. 7. DW1 nevertheless, conrmed in cross-examination, that the bank had remitted the respondent's premium for the entire policy period to the appellant. He acknowledged that the respondent's obligation to repay the nanced premium arose under the IPF arrangement with the bank, although the appellant maintained that the bank's notication of default justied its repudiation of the claim. 8. Upon considering the matter, Kasango J found in favour of the respondent in a judgment dated 5th November, 2019. The learned Judge held that the appellant had unlawfully repudiated a valid GIT insurance policy and was, therefore, liable to indemnify the respondent. Consequently, she entered judgment for the respondent for the sum of Kshs. 6,109,132 together with interest and costs. 9. Dissatised with the judgement, the appellant led the instant appeal and raised a litany of grounds in the memorandum of appeal dated 16th March 2020, which in summary, faulted the learned trial Judge for: i. Finding that the respondent had proved its case to the required standard. ii. Failure to nd that the suit was incompetent for want of a company resolution authorizing its institution, and in permitting ratication after judgment. iii. Failure to nd that the respondent failed to prove its loss by sucient documentary evidence, including the value of the loss, delivery notes, and a loss adjuster's report. iv. Misapplying the law on the burden of proof by shifting it to the appellant and relying on oral and hearsay evidence instead of documentary evidence. v. Finding that a valid GIT insurance policy existed, despite the respondent's alleged default in premium payments and breach of policy terms and warranties. https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1752/eng@2026-09-25 2

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10. The rm of M/s Wangai Nyuthe & Co. Advocates, led submissions dated 16th February, 2025 for the appellant contending that the trial Judge erred in law and fact by upholding a suit that had been instituted without a company resolution authorizing its commencement. Counsel argued that PW1 admitted on cross-examination that no such resolution existed. That the trial court further erred by directing the respondent to le a ratifying resolution after judgment, contrary to established principles of company law and procedure. In support of that position, counsel relied on the case of Chevron (K) Ltd vs Harrison Wa Shtu [2016] KECA 248 eKLR where the Court cited ` Bugerere Coee Growers Ltd v Sebaduka [1970] E A, Aordable Homes Africa Ltd v. Ian Henderson and 2 Others HCCC No. 2004, and R.V. Registrar General & 13 Others [2005] eKLR. 11. Counsel argued that the respondent failed to discharge its burden of proof under sections 107, 108 and 109 of the Evidence Act. That the respondent did not produce documentary evidence, such as valuation reports, a loss adjuster's report, delivery notes or other supporting documents, to establish either the quantity, or value of the petroleum products allegedly lost, to support the claim of Kshs. 6,109,132. Counsel contended that the trial Judge improperly shifted the burden of proof to the appellant and erroneously relied on unsupported oral evidence in allowing the claim. 12. On the award of interest, Counsel urged that the trial Judge erred in granting interest at commercial rates without evidence of the prevailing commercial rate. He accordingly invited this Court to allow the appeal, set aside the judgment of the High court, and award the appellant the costs of both the appeal and the proceedings in the High court. 13. In rebuttal, the respondent led submissions dated 23rd February, 2026 through the rm of M/s Stanley Henry Advocates and raised a Preliminary Objection to the Record of Appeal, contending that it deliberately omitted a crucial email dated 23rd January, 2014 from the appellant's Claims Supervisor, which stated as follows: “ We did not come o cover. The policy continued to run and the claim occurred." That this omission concealed an express admission of liability by the appellant, and rendered the Record of Appeal incomplete and liable to be struck out under the Court of Appeal Rules. 14. On the merits of the appeal, counsel asserted that the respondent had established that a valid GIT policy was in force throughout the material period, the entire premium having been paid by the bank under the IPF arrangement. Counsel argued that the appellant had no contractual right to invalidate the policy on account of the respondent's repayment obligations to the bank. He urged that the appellant was estopped from repudiating liability, after accepting the premium and admitting that the policy remained in force. 15. Counsel further contended that the trial court correctly held that the absence of a company resolution was a curable procedural defect, relying on Article 159(2)(d) of the Constitution. That the respondent had proved its claim on a balance of probabilities, while the appellant neither disputed the occurrence of the accidents, nor the loss suered and had, in any event, admitted liability through internal correspondence. 16. Lastly, Counsel argued that the complaint regarding the award of commercial interest is not one of the grounds contained in the Memorandum of Appeal and, therefore, cannot properly be raised through written submissions. In any event, it was argued that the Judge properly exercised her discretion in awarding commercial interest. https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1752/eng@2026-09-25 3

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17. The appeal came up for hearing in plenary via the virtual platform on 25th February, 2026. Mr. Mahugu learned counsel appeared for the appellant. There was no appearance for the respondent although duly served, but their submissions led on 23rd, February, 2026 were on record and have been considered in this judgment. 18. Our mandate as the rst appellate court was articulated in Gitobu Imanyara & 2 others v Attorney General [2016] eKLR as follows: “[A]n appeal to this Court from a trial by the High Court is by way of retrial and the principles upon which this Court acts in such an appeal are well settled. Briey put, they are that this court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowances in this respect.” 19. Before we delve into the merits of the appeal, we have the matter of the Preliminary Objection to dispose of. The respondent raised a Preliminary Objection seeking to strike out this appeal on the grounds that the record is incomplete as a crucial document was left out. 20. The procedure for striking out an appeal is found under rule 86 of this Court’s Rules which provides that: “ A person aected by an appeal may, at any time, either before or after the institution of the appeal, apply to the Court to strike out the notice or the appeal, as the case may be, on the ground— a. that no appeal lies; or b. that some essential step in the proceedings has not been taken or has not been taken within the prescribed time: Provided that an application to strike out a notice of appeal or an appeal shall not be brought after the expiry of thirty days after the date of service of the notice of appeal or record of appeal, as the case may be. 21. By the dictates of the foregoing rule, the respondent ought to have led an application seeking to strike out the appeal within thirty days after it was served with the record of appeal. The respondent having failed to comply with the aforementioned provision, and only invited us through submissions to address the issue, we nd that the matter is not properly before us and we, therefore, decline to consider it. We shall, therefore, proceed to consider the merits of the appeal. 22. Upon considering the record of appeal, the rival submissions and the law, we have distilled the issues for determination as follows: 23. i. Whether the respondent's suit was incompetent for want of a company resolution, ii. Whether the respondent proved its claim on a balance of probabilities, iii. Whether the learned Judge erred in awarding interest at commercial rates and, consequently, whether there is any basis for interfering with the judgment of the High Court. On the rst issue, the appellant argued that PW1 expressly admitted in cross-examination that no company resolution existed. Therefore, the Judge erred in directing the respondent to le a ratifying resolution after judgment had already been delivered, contrary to settled principles of company law and https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1752/eng@2026-09-25 4

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civil procedure. It was posited that the institution of proceedings by a company must be sanctioned by a resolution of the board of directors, failing which the suit is incompetent. 24. The respondent on the other hand, maintained that the omission to le a company resolution did not render the suit incompetent, as the defect was purely procedural and curable. That the Judge properly exercised her discretion by directing the respondent to le a ratifying resolution before execution of the decree, and that the appellant's objection was a mere technicality which did not occasion any prejudice and was properly rejected by the trial court. 25. This Court in Spire Bank Limited v Land Registrar & 2 others [2019] KECA 530 (KLR), considered the absence of a board resolution sanctioning the commencement of an action by the company and pronounced itself as follows: “ In this regard the learned judge found that there was no board resolution sanctioning the commencement of this action by the company, and therefore it was not properly before the court because “…The Ex-parte Applicant has not exhibited in the verifying adavit a copy of the resolution of the company authorizing the institution of these proceedings. There is also no evidence before this court that the said Josephine Musembi has been authorized by a resolution under seal.” Order 4 rule 1(4) provides as follows: “ 1 (4) Where the plainti is a corporation, the verifying adavit shall be sworn by an ocer of the company duly authorized under the seal of the company to do so.” It is clear from the provision, which is stated in mandatory terms, that for a company to le suit, there must be a verifying adavit sworn by an ocer of the company stipulating that he or she is duly authorized under the company’s seal to verify the adavit in respect of the suit. Such person would of necessity require to be authorized by a resolution of the Board of Directors or the members under seal of the company, in order for the suit to be instituted. Clarifying the position on the question of authorization in the case of Makupa Transit Shade Limited & Another vs Kenya Ports Authority & Another [2015] eKLR this Court stated thus; “ In our view, the Authority, as with other corporate bodies, has its adavits deponed on its behalf by persons with knowledge of the issues at hand who have been so authorized by it. It was therefore sucient for the deponents to state that “they were duly authorized.” It was then up to the appellants to demonstrate by evidence that they were not so authorized.” So that it was sucient for the authorized person to depone that he or she was duly authorized, but in the event of a complaint that such person was unauthorized, it was up to the disputing party to demonstrate with evidence that the deponent did not have the requisite authority, the onus being on the party making the allegation to prove it. A bare statement that the plainti or applicant was not authorized would not be sucient. It is essential to appreciate that the intention behind order 4 rule 1 (4) was to safeguard the corporate entity by ensuring that only an authorized ocer could institute proceedings on its behalf. This was to address the mischief of https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1752/eng@2026-09-25 5

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unauthorized persons instituting proceedings on behalf of corporations, and obtaining fraudulent or unwarranted orders from the court. The company’s seal that is axed under the hand of the directors ensured that they were aware of, and had authorized such proceedings together with the persons enlisted to conduct them. And where evidence was produced to demonstrate that a person was unauthorized, the burden shifted to such ocer to demonstrate that they were authorized under the company seal. With this in mind, we dare say that the provision was not intended to be utilized as a procedural technicality to strike out suits, particularly where no evidence was produced to demonstrate that the ocer was unauthorized. (Emphasis added) 26. Applying those principles to the present appeal, the record shows that the respondent's suit was instituted by a duly authorised director, who testied on behalf of the company throughout the proceedings. Although no board resolution accompanied the plaint, the trial Judge directed that one be led before execution of the decree. 27. In the absence of any demonstration that the appellant suered prejudice, or that the suit had commenced without the authority of the company, we nd that the omission was a curable procedural defect rather than a jurisdictional bar. Consequently, we cannot fault the trial court for declining to strike out the suit on that ground, and the appellant's challenge on this issue, therefore, fails. 28. The next issue is whether the respondent proved its claim on a balance of probabilities. The appellant contended that the Judge erred in nding that the respondent had proved its claim, despite the absence of documentary evidence establishing the existence of a valid insurance contract, the occurrence and extent of the insured loss, and compliance with the policy terms. Counsel argued that the respondent failed to produce essential documents, including delivery notes, a loss adjuster's report, valuation reports and other documentary proof of the quantity and value of the petroleum products allegedly lost. 29. In response, the respondent maintained that it had discharged the burden of proof on a balance of probabilities. That the evidence of PW1, together with the documentary exhibits, established that the appellant had issued a valid GIT policy covering the period from 1st March, 2013, to 1st March, 2014, and that the entire premium had been paid by the bank under the IPF arrangement. The respondent contended that the appellant did not dispute the occurrence of the two road trac accidents, or the resultant loss and had, in fact, admitted liability through an internal email acknowledging that: "We did not come o cover. The policy continued to run and the claim occurred." 30. The legal burden of proof rests upon the party who asserts a fact. Sections 107 and 109 of the Evidence Act require a claimant to prove the existence of facts upon which his claim is founded, while section 112 places the evidential burden on the party possessing peculiar knowledge of a particular fact. 31. In Palace Investments Limited v Georey Kariuki Mwenda & another [2015] KECA 616 (KLR), this Court pronounced itself on the degree required to discharge the burden of proof on a balance of probabilities as follows: “ In making such a determination we need to examine whether the appellant discharged its burden of proof on a balance of probability to prove ownership of the motor-vehicle. The burden of proof is placed upon the appellant and is to be discharged on a balance of probabilities. Denning J. in Miller –vs- Minister of Pensions [1947] 2 ALL ER 372 discussing the burden of proof had this to say:- https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1752/eng@2026-09-25 6

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“That degree is well settled. It must carry a reasonable degree of probability, but not so high as is required in a criminal case. If the evidence is such that the tribunal can say: ‘We think it more probable than not’, the burden is discharged, but, if the probabilities are equal, it is not. Thus, proof on a balance or preponderance of probabilities means a win, however narrow. A draw is not enough. So, in any case in which the tribunal cannot decide one way or the other which evidence to accept, where both parties’ explanations are equally (un)convincing, the party bearing the burden of proof will lose, because the requisite standard will not have been attained.” 32. Likewise, in Kirugi & Another v Kabiya & 3 Others [1987] KLR 347, the Court emphasized that the burden of proof remains with the plainti even where the defence adduces little or no evidence. 33. In the present appeal, it is evident that the respondent established the existence of a valid insurance contract. Both Pw1 and Dw1 conrmed that the bank had paid the entire premium to the appellant under the IPF arrangement for the period between 1st March, 2013 and 1st March 2014. The evidence further established that the respondent's obligation was to the bank to make reimbursements under a separate nancing agreement and not to the appellant. As the learned Judge correctly observed, the appellant failed to demonstrate any contractual entitlement to reverse premiums already paid, or to invalidate the policy without privity of contract, merely because the bank notied it of an alleged default in the respondent's instalment payments. 34. The record further shows that the occurrence of the two insured accidents and the ling of the respondent's claims were not seriously disputed. Signicantly, the appellant's internal correspondence acknowledged that the policy remained in force when the losses occurred and merely proposed deducting the outstanding premium from the claim proceeds. That admission substantially undermined the appellant's contention that the policy had ceased to exist, and constituted cogent evidence that liability under the policy had crystallized. 35. Although the appellant criticized the respondent for failing to produce additional documentary evidence relating to the value of the loss, the trial Judge evaluated the evidence as a whole and found that the respondent had proved its claim on a balance of probabilities. An appellate court will not ordinarily interfere with ndings of fact unless they are based on no evidence, are founded on a misapprehension of the evidence, or the trial court demonstrably acted on wrong principles, as stated in Selle & Another v Associated Motor Boat Co. Ltd & Others [1968] EA 123. No such error has been demonstrated in the present appeal. Consequently, we are satised that the learned Judge properly concluded that the respondent had proved its claim. 36. Turning to the last issue, the appellant contended that the Judge erred in awarding interest at commercial rates because the respondent neither pleaded the applicable commercial rate with specicity, nor adduced evidence to establish the prevailing rate. Counsel argued that, in the absence of such evidence, the trial court had no legal basis for awarding commercial interest and ought to have conned itself to court rates. The appellant, therefore, urged this Court to set aside that part of the decree. 37. The respondent, in reply, argued that the issue of commercial interest did not arise for determination, since it had not been specically pleaded as a ground in the Memorandum of Appeal. Counsel maintained that an appellant is bound by its grounds of appeal and cannot introduce a fresh complaint through submissions. In any event, it was submitted that the transaction arose from a commercial insurance contract and the learned Judge properly exercised her discretion in awarding interest at the commercial rate of 18% per annum. https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1752/eng@2026-09-25 7

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38. Although the respondent submitted that the issue of commercial interest was not specically raised in the Memorandum of Appeal, we are satised that the grounds challenging the judgment and decree were suciently broad to encompass the legality of the interest awarded. In any event, an appellate court is entitled to interfere where the trial court has exercised its discretion on wrong principles, or has made an award unsupported by the evidence on record. 39. A court has discretion under section 26(1) of the Civil Procedure Act to award interest. The section provides that: “ Where and in so far as a decree is for the payment of money, the court may, in the decree, order interest at such rate as the court deems reasonable to be paid on the principal sum adjudged from the date of the suit to the date of the decree in addition to any interest adjudged on such principal sum for any period before the institution of the suit, with further interest at such rate as the court deems reasonable on the aggregate sum so adjudged from the date of the decree to the date of payment or to such earlier date as the court thinks t. 40. However, the exercise of that discretion must be founded on the pleadings, the evidence, and the circumstances of the case. We had recourse to this Court’s decision in Total (Kenya) Limited Formally Caltex Oil (Kenya) Limited v Janevams Limited [2015] KECA 822 (KLR) where it was stated that: “Having found so, what should have been the interest rate? As stated earlier, the grant of an award of interest is an exercise of a judge’s discretion, but that discretion must always be exercised within limits. It must not be capricious or based on whim………………………………………….. …………………………………………………………………. The rate of 35% was suggested by the respondent, who said that it was a commercial rate that had been provided by his bankers. On cross examination, he stated that he had no proof of the communication with his bankers. There was never any basis therefore of this rate and the most appropriate route would have been to award interest at court rates.” 41. Earlier on in Abok James Odera T/A 10 A.J Odera & Associates v John Patrick Machira T/A Machira & Co. Advocates [2013] eKLR (Civil Appeal No. 161 of 1999), the Court had occasion to confront an appeal where the learned Judge had awarded interest of 25% claimed by a party in the plaint. The Court considered the propriety of that rate of interest and stated that the Judge fell into error in awarding that rate when it had neither been provided for in the agreement between the parties, nor in the documents led before the court. The Court stated as follows: “ Bearing the above principles in mind, we make no hesitation in nding that the learned trial Judge made an error in awarding interest as prayed in the plaint at the rates of 25% from 4th March, 1996 when the same had neither been provided for in the said agreement or justication made for its claim by the respondent both in the plaint led, adavit in support of the application for summary Judgment and or oral highlights in court at the time of the respondents request for the said summary Judgment. We appreciate that section 26 (1) of the Civil procedure Act Cap 21 Laws of Kenya tended to give the learned trial Judge a wide discretion with regard to the award of interest. It reads:Where and in so far as a decree is for the payment of money, the court may in the decree order interest at such rates as the court deems reasonable to be paid on the principal such https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1752/eng@2026-09-25 8

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adjudged from the date of the suit to the date of decree in addition to any interest adjudged on such principal sum for any period before the institution of the suit…” 42. The above discretion not withstanding it is now trite that the exercise of the judicial discretion donated by section 26(1) above is not absolute. It has to be exercised judiciously, not with caprice or on a whim but with reason. In the case before us the learned trial Judge rendered herself thus in awarding interest at a commercial rate of 18% per annum: “ 22. The plainti’s business is the transportation of petroleum products. The accident occurred and caused loss of those products that were being transported. The plainti would undoubtedly have put the compensation, which the defendant should have paid, to use to generate more income. The plainti has been denied by the defendant the opportunity to generate interest on that amount since 2013 to date. It is, in my view, entitled to commercial rate of interest.” 43. We have combed through the record of appeal and we have not come across any evidence directing us to the commercial interest rate at that period. In our view, therefore, the learned trial Judge failed to provide the basis for awarding the interest at a commercial rate of 18%. Accordingly, we nd merit in the appellant's challenge to the award of interest. 44. Consequently, this appeal partially succeeds only to the extent of setting aside the interest awarded at the commercial rate. We substitute it with an order that the decretal sum shall attract interest at court rates from the date of ling suit until payment in full. Each party shall bear its own costs. It is so ordered. DATED AND DELIVERED AT NAIROBI THIS 25TH DAY OF SEPTEMBER, 2026. W. KARANJA ............................ JUDGE OF APPEAL L. ACHODE ……………………… JUDGE OF APPEAL AHMED HASSAN ............................ JUDGE OF APPEAL I certify that this is a true copy of the original Signed DEPUTY REGISTRAR https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1752/eng@2026-09-25 9

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