Old Mutual General Insurance has suffered a blow after the High Court declined to stop an aircraft leasing firm from enforcing compensation of $3 million (about Sh388 million) against the insurer following an accident about three years ago.
High Court Judge John Chigiti dismissed an application by the underwriter, paving the way for Tropic Air to seek the compensation.
The judge noted that Old Mutual and the aircraft firm as well as the Insurance Regulatory Authority (IRA) have been engaged in various court cases, touching on the matter hence issuing any orders could affect the cases.
“Issuing the orders, sought will no doubt have an impact on these suits or have an impact on the subsisting or pending activities in the said files thereby occasioning an embarrassment to the court. In any event, the applicant has not demonstrated why it did not seek redress within these suits,” said the judge.
The insurance firm had sought to stop Tropic Air from enforcing a decision of the IRA made in November 2023, for the underwriter to settle the claim.
Last month, another judge dismissed a similar application and directed Tropic Air to initiate liquidation proceedings against Old Mutual Insurance within 90 days, if the claim was not settled.
Tropic Air Ltd demanded payment of $3 million (about Sh388 million) after its aircraft was involved in an accident in Turkana in 2022.
In support of the application, Mr Frankline Nyaga said in an affidavit that the debt was disputed and an appeal against the IRA’s judgment was ongoing.
Director of Tropic Air James David Roberts said the debt stems from an accident involving an aircraft in August 2022, for which compensation was sought.
Mr Roberts said despite a legitimate claim being raised, the insurer failed to settle, and IRA had directed Old Mutual to pay on November 3, 2023, but the insurance firm did not comply.
He said the insurer later withdrew the appeal and thus the decision of the insurance regulator, remained unchallenged.
IRA submitted that it followed due process as prescribed in the Insurance Act, took into consideration submissions of all the parties, and observed the rules of natural justice in delivering its decision. “The applicant has not exhausted the redress avenues available within the above legal avenues that are at its disposal,” said the judge while dismissing the case.
Last month, Justice Josephine Mong’are ordered Old Mutual Holdings to deposit Sh500 million in an interest-earning escrow account, pending the determination of a case filed by tycoon Joel Kibe.
Justice Mong’are said the insurer should deposit the amount as a condition for allowing Old Mutual to sell UAP Tower in Upper Hill.
The firm said it intended to sell the building for Sh5.5 billion as part of its plan to inject the much-needed capital into Old Mutual and also offset other company loans and obligations.
Mr Kibe had claimed that he was apprehensive that the intended sale would prejudice him as a minority shareholder and the court should not permit the same as he stands to suffer loss of Sh246.6 million that he invested in the company.
