The High Court overturned an order compelling Britam to pay an accident victim, ruling that Small Claims Courts lack jurisdiction over such insurance disputes. However, the claimant retains his decree and can pursue payment before a competent court.
Britam General Insurance has overturned a court order compelling it to pay KSh239,836 to an accident victim.
However, the victory does not free the insurer from potential liability.
Justice Reuben Nyakundi ruled on October 5, 2026, that the Eldoret Small Claims Court lacked jurisdiction to compel insurers to settle decrees against policyholders.
The decision overturned an order requiring Britam to satisfy a judgement obtained by Henry Kamau Kinygia.
Yet the judge deliberately left the underlying insurance dispute unresolved.
Kinygia can still pursue payment before a court with the necessary jurisdiction.
The ruling instead raises a crucial question about where accident victims should seek enforcement of unpaid judgements.
Unpaid Decree
The dispute began after Kinygia sustained injuries in an accident involving motor vehicle registration number KCK 855T.
He sued the vehicle’s insured, Peter Njoroge Ndung’u, in Eldoret Small Claims Court Civil Claim No. E318 of 2022.
On March 10, 2023, the court entered judgement in Kinygia’s favour.
The award comprised KSh189,600 in compensation, KSh6,636 in interest, and KSh43,600 in certified costs.
The total reached KSh239,836, but the decree remained unpaid despite subsequent demands.
Kinygia then turned to Britam, which had insured the vehicle during the relevant period.
He filed a separate suit seeking to compel the insurer to satisfy the decree. His claim relied on Section 10 of the Insurance (Motor Vehicle Third Party Risks) Act.
The provision generally requires insurers to satisfy qualifying judgements against insured persons, subject to statutory conditions.
On July 26, 2024, the Small Claims Court agreed with Kinygia. The adjudicator ordered Britam to pay and awarded him costs.
Britam appealed on August 2, 2024, challenging both the court’s jurisdiction and its interpretation of the insurance law.
Coverage Dispute
Britam argued that its policy did not cover the circumstances surrounding Kinygia’s injuries.
Its underwriter, Peter Ogago, described the cover as a Motor Commercial – Own Goods policy.
According to the insurer, the policy covered the owner while transporting his own goods.
Britam alleged that the lorry had been hired out and carried passengers contrary to the policy’s restrictions.
The insurer also relied on exclusions concerning passenger injuries and unauthorised vehicle use.
It maintained that the policy did not cover the liability underlying Kinygia’s compensation claim.
Kinygia argued that breaches between an insurer and its policyholder should not automatically defeat third-party rights.
During cross-examination, Ogago confirmed that Britam insured the vehicle during the relevant period.
He also acknowledged that Kinygia was not party to the insurance contract.
The underwriter accepted that statutory notices carried Britam’s postal address and might have reached its legal department.
However, he could not confirm whether the company had responded.
The Small Claims Court treated Britam’s failure to institute proceedings under Section 10(4) as decisive.
The High Court declined to determine whether that interpretation was legally correct.
Wrong Court
Justice Nyakundi focused on whether Section 12 of the Small Claims Court Act authorised the proceedings.
The law restricts the court to specified categories of civil claims and a monetary ceiling of KSh1 million.
Although Kinygia’s claim fell below that limit, the judge said the amount alone could not establish jurisdiction.
A claim must also fall within the categories Parliament expressly authorised.
The judge distinguished the original personal injury case from the subsequent action against Britam.
The first case determined liability for the accident and assessed compensation. The second sought to enforce the insurer’s separate statutory obligation to satisfy that judgement.
Kinygia was not suing Britam under an insurance contract he had signed. His claim instead arose from the statutory framework governing third-party motor insurance.
The judge rejected the argument that the dispute qualified as a personal injury claim.
That category concerns determining liability for injuries and assessing compensation, already addressed in the original proceedings.
Extending it to every subsequent enforcement action would improperly expand the Small Claims Court’s jurisdiction.
Justice Nyakundi also relied on Kenya Orient Insurance Limited v Otieno, decided by Justice Roselyne Aburili in 2024.
That decision similarly held that declaratory suits compelling insurers to settle decrees fall outside the Small Claims Court’s mandate.
No Final Escape
Britam had not challenged jurisdiction before the trial court. Instead, it defended the claim on its merits before appealing.
Justice Nyakundi nevertheless held that jurisdiction could be challenged on appeal. Participation in proceedings cannot give a court powers that the law withholds.
As the judge explained, “acquiescence cannot confer a jurisdiction the law has withheld.”
The High Court set aside the July 2024 judgement and struck out Kinygia’s declaratory claim.
It rejected Britam’s request for outright dismissal because that could imply a determination on the merits.
Crucially, the judge did not rule that Britam owed nothing.
The passenger exclusions, alleged policy breaches, and effect of Section 10(4) remain unresolved.
Kinygia’s original decree against Ndung’u remains valid and unaffected. He can pursue Britam before a court with competent jurisdiction, subject to the law.
READ ALSO: 10 Factors to Consider When Choosing a Life Insurance Plan
The judge also ordered the release of any security Britam deposited pending appeal. However, each party must bear its own legal costs.
Justice Nyakundi reasoned that Britam could have raised jurisdiction earlier, potentially avoiding the trial and much of the appeal.
The decision delivers a procedural victory for Britam but leaves the claimant’s pursuit of compensation alive.
For Kinygia, the battle over the unpaid decree must now continue in the proper court.
PAY ATTENTION: Reach us at info@gotta.news.
