Companies
APA to pay manufacturer Sh82m for fire damages
Monday March 06 2023
Ashok Shah, CEO of APA Insurance. FILE PHOTO | LIZ MUTHONI | NMG
APA Insurance Ltd has been ordered to pay a manufacturer more than Sh82 million for damages suffered after a fire destroyed its premises seven years ago.
High Court judge Alfred Mabeya directed APA Insurance Ltd to compensate Britind Industries Ltd, a manufacturer of toiletries, furniture and interior decorations among other items, for general damages after the factory in Nairobi’s Industrial Area was destroyed by fire in December 2015.
The court heard that the premises caught fire as employees were enjoying an end-of-year party. The insurer had refused to indemnify the manufacturer claiming the fire was started by arsonists.
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The company’s director Santosh Kumar Singh said finished goods were completely lost while the plant and machinery were badly damaged by the fire.
“The upshot of this is that the defendant (the insurer) was liable to indemnify the plaintiff for the loss suffered,” the judge said.
The court said the underwriter failed to demonstrate that it was Mr Kumar who started the fire or was involved in the cause of the fire.
Mr Kumar through his lawyer John Ogada sought to be paid general damages for expenses paid to experts and consultants, loss of business and also loss of profits.
Mr Ogada told the court that the factory caught fire on December 31, 2015, as employees were having an end-of-the-year party.
Other than the destruction caused at the factory and business premise, the plant and machinery, manufactured products, raw materials, finished products, furniture and fittings were also destroyed.
Mr Ogada said the factory had been insured against losses resulting from fire in a contract for the period between November 2015 and November 2016.
He said the insurer refused to pay the claim alleging that the owners may have caused the fire.
The insurer admitted insuring the company against business risks and losses arising from fire and the refusal to pay was because the company failed to disclose some facts about the cause of the fire.
The court also heard that the manufacturer engaged in unethical behaviour by attempting to defraud the insurer.
The insurer called Prof Joseph Karanja Thiong’o, a chemical scientist from the University of Nairobi who said his investigations and analysis revealed that the cause of fire was arson.
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“I find merit in the claim for Kshs 82,333,324.78 against the defendant and enter judgment accordingly,” the judge said, adding that the amount will attract interest at 12 percent from 2016 when the case was filed.
