George Muhia Kahubi v Kenya Orient Insurance Limited

accident through his insurance agent and additionally forwarded the police abstract and other relevant documentation to the Defendant. 3. It is the Applicant’s averment that on 16.06.2025, the Interested Party filed a claim against him before the Small Claims Court at Nairobi vide SCCC No. E3815 of 2024 (the primary suit); that the Defendant instructed the firm of Kinyanjui Njuguna & Co. Advocates to enter appearance and defend the Applicant’s interest therein and that judgment was delivered in favour of the Interested Party in the primary suit, in the sum of Kshs. 388,080/- as a result of which the Interested Party’s advocates subsequently commenced the execution process. 4. It is the Applicant argument that given the existence of the Policy agreement between himself and the Defendant, the latter is legally and statutorily obligated to satisfy the decree arising from the primary suit; that despite several reminders, the Defendant has to date refused and/or neglected to settle the decretal amount on behalf of the Applicant and that as a result, the Applicant is apprehensive that unless the order sought in the instant application is granted, the Interested Party and/or his agents will proceed to attach and sell the subject motor vehicle in execution of the decree. The Grounds of Opposition 5. The Respondent has opposed the Application through Grounds of Opposition dated 16.01.2026 based on the following grounds (captured as phrased): i. That the application for stay of execution as the same is made in bad faith and may well amount to an of the abuse of the Court process. ii. That until execution commenced, the Plaintiff/Applicants were aware of this judgment but were quiet on it only applying herein as a knee – jerk reaction to the victims efforts to realize the lower Court’s judgment. iii. That the primary obligation of settling a judgment lies on the Plaintiff (Respondent in the primary suit) and secondary liability has not attached. iv. That the Applicant has not showed any commitment/efforts to settle themselves only decrying an insurance contract that is yet to be proved. v. That the Applicant has not showed why they should not compensate their victim as adjudged by the lower court and pursue their insurer in this forum. vi. That the Small claims has jurisdiction to enforce its own judgments in a timely fashion under that Court’s statute and bringing this suit herein is mala fides meant to delay realization of the fruits of judgment to the interested party and escape bearing the brunt by having stay of execution without condition. vii. That it is only fair that the Application for stay pending hearing of this suit be dismissed with costs to the interested party to allow the Applicant enforce its contract with the Defendant without dragging the Interested party into their fight.” sic Written Submissions 6. The Application was canvassed through written submissions. The Applicant has submitted that the instant application is merited since Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act Cap. 405 Laws of Kenya stipulates that an insurer is obligated to pay persons entitled to the fruits of a judgment as long as it has been established that such insurer had notice of the relevant suit; that he has proved by way of sufficient material, that at the time of the material accident, the Policy was subsisting https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7416/eng@2026-04-14 2

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and that any liability arising from the accident was covered under the said Policy and therefore, the Defendant is obligated to settle the decretal sum owed to the Interested Party. 7. It is also the Applicant’s submission that unless the order sought is granted, the Interested Party will proceed with execution against him, thereby providing means for the Defendant to evade its contractual obligation to satisfy the decree arising from the primary suit. The Applicant has urged this court to allow the Application as prayed. 8. In his submissions, the Interested Party anchored his case on Order 42, Rule 6 of the CPR which sets out the conditions to be met in order for a stay of execution to be granted and submitted that none of the conditions listed thereunder has been satisfied in this instance. He argued that the Applicant has not demonstrated the manner, if any, in which he stands to suffer substantial loss if a stay is denied and that the existence or payment of a debt or contract does not constitute sufficient reason of substantial loss. 9. It is equally the Interested Party’s submission that the primary duty of settling a personal injury claim rests with a tort feasor defendant, irrespective of whether or not an insurance policy exists. To support that argument, the Interested Party relied on the case of Njeru Patrick v Invesco Assurance Co. Ltd. (2021) eKLR and the case Nof chau v Gatimu [2025] KEHC 10975 (KLR). He submitted that no privity of contract exists between himself and the Defendant, in any event and that the Application is unmerited and therefore ought to be dismissed with costs. 10. In the alternative, the Interested Party submitted that should this court find in favour of the Applicant, then the Applicant ought to be ordered to furnish a bank guarantee as security for the due performance of the decree, as a condition for granting an order for a stay of execution. 11. Going by the record of the Court, the Defendant, though served, neither filed any documents in respect of the Application nor participated in the present proceedings. Analysis and Determination 12. I have considered the Application and the grounds in support of it. I have considered the Grounds of Opposition and the rival written submissions. It is evident that there is only one substantive prayer sought, to wit, an order for stay of execution of the judgment delivered on 15.10.2025 pending hearing and determination of the present declaratory suit. 13. It is trite law that the courts have discretionary power to grant an order for a stay of execution of a decree or order, which discretion should be exercised judicially. 14. While it is noted that the order herein is sought pending hearing and determination of the suit, I find that the principles laid out in Order 42, Rule 6(2) of the CPR relating to a stay of execution pending appeal, are still applicable here. 15. An applicant seeking stay of execution must demonstrate substantial loss likely to occur to him unless the order for stay is granted; the applicant must demonstrate that he has brought the application seeking the order for stay without unreasonable delay and readiness to give security for the due performance of the decree or order as may ultimately be binding on him. 16. On whether the Application has been brought without unreasonable delay, the record shows that judgment in the primary suit was delivered on 15.10.2025, whereas this application was brought about two (2) months later, on or about 19.12.2025. I have considered this issue and my view is that the delay of about two months is not unreasonable. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7416/eng@2026-04-14 3

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17. On whether the Applicant has demonstrated substantial loss, I am guided by the Court of Appeal decision in Kenya Shell Ltd v Kibiru & Another [1986] KLR 410 where the Court (Platt Ag JA, as he then was) stated that, inter alia, that: “ The appeal is to be taken against a judgment in which it was held that the present Respondents were entitled to claim damages. It is a money decree. An intended appeal does not operate as a stay. The application for stay made in the High Court failed because the gist of the conditions set out in Order XLI Rule 4 (now Order 42 Rule 6(2)) of the Civil Procedure Rules was not met. There was no evidence of substantial loss to the Applicant, either in the matter of paying the damages awarded which would cause difficulty to the Applicant itself, or because it would lose its money, if payment was made, since the Respondents would be unable to repay the decretal sum plus costs in two courts.” 18. The learned Judge continued to observe that: “ It is usually a good rule to see if Order XLI Rule 4 of the Civil Procedure Rules can be substantiated. If there is no evidence of substantial loss to the Applicant, it would be a rare case when an appeal would be rendered nugatory by some other event. Substantial loss in its various forms, is the cornerstone of both jurisdictions for granting stay. That is what has to be prevented. Therefore, without this evidence, it is difficult to see why the Respondents should be kept out of their money.” 19. I have considered the averments by the Applicant on the manner in which he stands to suffer substantial loss, alongside the opposing arguments by the Interested Party on the same subject. I have weighed the conflicting interests of the Interested Party who is the successful party in the primary suit and who ought to be granted the privilege of enjoying the fruits of the judgment against the interest of the Applicant who has pleaded substantial loss if the order for stay is not granted. 20. I have considered the argument by the Applicant that unless a stay order is granted, the Interested Party will proceed with the execution process while the Defendant will evade its contractual responsibility of satisfying the decree and I find that the Applicant has not demonstrated the manner in which declining to grant the order for stay would assist the Defendant in evading its contractual obligations under the Policy. It is my considered view that irrespective of whether an insurance policy exists between the Applicant and the Defendant, the primary obligation to satisfy the decree rests with the Applicant in the instant application because he is one of the defendants in the primary suit against whom judgment was delivered. Further, it is established that no privity of contract exists between the Interested Party and the Defendant, in order to justify the order sought against him. 21. The above view is supported by the case of Nchau v Gatimu [2025] KEHC 10975 (KLR), where the court held that: “ I should respectfully agree with Kogi v Muchiri (Sued as the Administrator of Ruth Wambui Muchiri - Deceased) (Miscellaneous Civil Case E155 of 2024) [2025] KEHC 7393 (KLR) (22 May 2025) (Ruling) where Muchemi J. held: it is evident that the primary duty of settling the decree falls squarely on the applicant. In the event the applicant’s insurer fails to satisfy the decree, the applicant will still be called upon to satisfy the decretal amount. The respondent is not privy to the contract between the applicant and his insurer. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7416/eng@2026-04-14 4

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In the same vein, the Court has noted the decision in Njeru Patrick Vs. Invesco Assurance Co. Ltd. (2021) eKLR, where the Court (Odunga, J. as he then was) stated that: “ I must however state that the primary obligation of settling the decree falls squarely on the Applicant and in the event the Defendant as his insurer fails to satisfy the decree, the Applicant will still be called upon to satisfy the same. The mere fact that the Defendant is bound both contractually and statutorily to satisfy the decree does not absolve the Applicant from meeting his obligations under the tort of negligence. Therefore, I respectfully disagree with the view that by not granting the stay herein, the Court will be assisting the defendant to avoid a contract whose terms are dictated by statute, to compensate the interested parties herein then revert to the plaintiff to recoup any extra sums that they may have paid to third (interested) parties. It must be noted that nothing prevents the Applicant from settling the decretal sum and then suing the Defendant for compensation or reimbursement.” 22. In balancing the competing interests of the parties herein, I am guided by the above cited case of Nchau v Gatimu where the court was faced with similar circumstances, as was the court in the decision in Pasha Enterprises Limited v Kenya Alliance Insurance Company Limited; Karama & Yussuf (Suing as the Legal Representatives of the Estate of Abdul Wahab Hassan -Deceased) & 3 others (Interested Parties) [2024] KEHC 5185 (KLR). In both instances, the respective courts upon weighing the competing interests of the parties, issued an order for a conditional stay of execution. 23. Upon considering the foregoing circumstances alongside the authorities cited above and upon considering the declaratory nature of the suit, I am inclined, in the interest of substantive justice; to grant an order for a conditional stay of execution. 24. The record shows that the decretal sum awarded by the Small Claims Court was Kshs. 343,050/-. While the Applicant did not address the issue of providing security for due performance as an alternative for granting stay, the Interested Party’s proposal is that if granted, a stay of execution be made conditional upon the Applicant depositing the decretal sum plus Auctioneer charges in a joint interest earning account within 14 days of the order. 25. I have considered this proposal. There is no legal requirement on the provision of Auctioneer charges as part of security for the due performance of the decree. Nevertheless, it is a legal requirement for an applicant to provide security as a condition for stay. Consequently, I will, and do hereby, allow the Notice of Motion dated 8.12.2025 on the following terms: 26. a. An order for a stay of execution of the judgment delivered on 15.10.2025 in SCCC No. E3815 of 2024 be and is hereby issued pending the hearing and determination of the declaratory suit, on the condition that the Plaintiff/Applicant deposits the decretal sum of Kshs. 343,050/- in an interest earning account in the joint names of the parties’ advocates/firm of advocates within 30 days from today, failing which the order for stay shall automatically lapse. b. The Applicant shall also bear the costs of this application. It is so ordered. DATED, SIGNED AND DELIVERED THIS 14TH DAY OF APRIL 2026. S. N. MUTUKU JUDGE https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7416/eng@2026-04-14 5

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In the presence of: 1. …………………………………….for the Applicant 2. …………………………………….for the Interested Party https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7416/eng@2026-04-14 6

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