Ukwala Supermarket (Kisumu) Limited v Kenindia Assurance Company Limited [2017] KEHC 9748 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

MILIMANI LAW COURTS

COMMERCIAL AND TAX DIVISION

CIVIL SUIT NO. 153 OF 2009

UKWALA SUPERMARKET (KISUMU) LIMITED..........PLAINTIFF

VERSUS

KENINDIA ASSURANCE COMPANY LIMITED..........DEFENDANT

JUDGMENT

[1]The Plaintiff, Ukwala Supermarket (Kisumu) Limited, is a limited liability company incorporated and carrying on business within the Republic of Kenya. At all times material to this suit, it was engaged in the business of running a chain of supermarkets, with outlets in various towns in Kenya, including Kisumu. To protect its business against perils such as fire, theft and other similar risks, the Plaintiff took out the following insurance policies with the Defendant, Kenindia Assurance Company Limited:

[a] Fire and Special Perils Policy...No. P/104/041/0441/2004/30063/11

[b] Fire and Special Perils Policy...No. P/104/040/11/33809/2003/08

[c] Electronic Equipment Policy....No. P/104/021/0334/2007/2/03

No. P/104/024/11/40413/2003/08

[d] Cash in Transit Policy...............No. P/104/100/11/31099/2003/08

[2]The Plaintiff averred that it was a fundamental term of the policies that upon paying the respective premiums, the Defendant would unconditionally indemnify and keep the Plaintiff indemnified against the risks covered under the said policies; and would, upon demand and notification of any events covered under the policies, pay to the Plaintiff in respect of any loss, damage or injury suffered in consequence of risks covered in the said policies. In particular, it was the averment of the Plaintiff that it was expressly agreed between the Plaintiff and the Defendant that the Defendant would pay for any losses occasioned by the following risks under the policies aforestated:

[a]With respect to the Fire and Special Perils Policy, the loss  entailed from interruption of or interference with the Plaintiff's  business caused by destruction to the Plaintiff's business building  or property therein;

[b] With respect to the Electronic Equipment Policy, the loss  covered was any unforeseen and sudden physical loss or damage  of electronic equipment necessitating repair or replacement;

[c]With respect to the Cash in Transit Policy, the Plaintiff was  insured for loss of cash in direct transit, loss of cash in the premises  in cash tills, locked drawers and locked safes.

[3] The Plaintiff's cause of action was that, on the 29 December 2007, during the existence, subsistence and validity of the said policies, its supermarkets in Kisumu were broken into by a mob and as a result, its property, equipment and money was stolen and the premises set on fire. That as a consequence of the foregoing, the Plaintiff suffered substantial loss and damage, amounting to Kshs. 181,593,208/= as at 31 January 2008. The Plaintiff particularized the loss suffered by it as hereunder:

No. Particulars Amount (Kshs.)

1. Loss of stocks 98,079,039. 00

2. Furniture, Fitting and Fixtures (Kenshop) 16,592,943. 00

3. Electronic Equipment 11,053,093. 00

4. Cash 5,868,133. 00

5. Loss of Profit 50,000,000. 00

Total 181,593,208. 00

[4] It was the Plaintiff's contention that the aforesaid loss was fully and expressly covered by the policies, and added that, having duly paid the Defendant all the agreed insurance premiums for the year 2007,it was eligible for indemnity. The Plaintiff further contended that, since none of the exclusion clauses contained in the said policies is applicable to its claim, the Defendant is bound to honour its obligations as set out in the said policies; but that despite several demands made and notice of intention to sue being duly given, the Defendant had failed, neglected and/or refused to settle its claim. Accordingly, the Plaintiff filed this suit praying for Judgment against the Defendant for:

[a] The sum of Kshs. 181,593,208/= aforementioned.

[b] Costs of this suit plus interest at court rates till payment in    full.

[c] Such other further relief that the Court may deem fit to grant.

[5] In its Statement of Defence filed herein on 6 April 2009, the Defendant denied the Plaintiff's claim contending that, save that the Plaintiff took out policies as set out in Paragraph 3 of the Plaint, the risks were covered subject to the terms and conditions set out in the said policies. It further averred that, on or about 29 December 2007, there was civil commotion in Kisumu and other areas in the Republic of Kenya in which numerous buildings including the Plaintiff's supermarkets were broken into, looted and set on fire; and that the events that took place in the Plaintiff's premises on or about the 29 December 2007had every colour and shade of a civil commotion, assuming the proportion of or amounting to a popular uprising and were part of the general effects of the Post Election Violence experienced in Kenya at the conclusion of the 2007 General Elections; and was therefore not covered by any of the respective policies taken by the Plaintiff. The Defendant thus averred that:

[a] The Fire and Special Perils Policy excluded damage  occasioned by or through or in consequence, directly or indirectly  of civil commotion assuming the proportion of or amounting to a  popular uprising;

[b] The electronic Policy excluded riot, civil commotion, a group  of malicious persons acting on behalf of or in connection with any  political organization;

[c] The Cash in transit policy excluded liability for riot or civil  commotion and was only extended to cover those eventualities  after the event; and that in any case, the Plaintiff failed to maintain  proper books of account, and to provide a safe in each of the  premises covered by the policies as specified in each of the  respective policy.

[6]Hence, while conceding that the Plaintiff suffered loss and damage as claimed, the Defendant denied that the said loss was to the extent claimed in Paragraph 7 of the Plaint, or that the loss was indemnifiable. Accordingly, the Defendant prayed for the dismissal of the Plaintiff's suit with costs. In its Amended Defence filed herein on 17 May 2013, the Defendant contended, in further reply to Paragraph 6 of the Plaint, that the damage to the Plaintiff's premises on 29 December 2007 was occasioned by or through acts of terrorism as defined in the policy; in respect of which the Plaintiff joined issues with the Defendant vide its Amended Reply to Amended Defence filed on 20 May 2013.

[7] The trial commenced on 4 February 2014 and the Court (Kamau, J.) proceeded thereafter to take the evidence of four of the Plaintiff's five witnesses before being transferred out of station. The proceedings thereafter continued pursuant to Order 18 Rule 8(1) of the Civil Procedure Rules, 2010 and came to a close on 18 July 2017 with the oral highlighting of the written submissions filed herein by Learned Counsel for the parties. The Plaintiff set out to prove that it had taken out various policies with the Defendant to protect it against such perils as theft and/or destruction of its premises, equipment, stock and cash; and that during the subsistence of those policies, its supermarkets in Kisumu were broken into, looted and one of them burnt down, thereby causing it immense loss and damage. The Plaintiff further set out to demonstrate that the Defendant was under obligation to indemnify it for the loss and damage suffered, amounting to Kshs. 181,593,208/=, but that the Defendant had failed to do so. To that end, the Plaintiff called 5 witnesses whose evidence is summarized here below.

[8] The Plaintiff's first witness, Hitesh M. Dhanani (PW1) is one of its directors. His evidence, as set out in his Witness Statement dated 14 February 2012, which he adopted as his evidence herein, was that when he joined the Plaintiff in 2003, the company had only one outlet in Kisumu known as Kenshop. In the course of time, the Plaintiff acquired Foamat Supermarket as a going concern and the same was renamed as Ukwala Foamat in November 2006. He testified that the Plaintiff then commenced renovations of Ukwala Foamat in July 2007 with a view to establishing an additional floor to expand the trading area and to increase the turnover; and that the renovations were completed in November 2007, whereupon the supermarket commenced operations with 230 junior staff and 11 senior staff.

[9] It was thus the evidence of PW1 that the Plaintiff would make up to Kshs. 75,000,000/= per month from both shops, and that as at December 2007 the sales amounted to Kshs. 83,000,000/=. He added that it was their routine to collect cash from the cashiers at the tills twice or three times a day, depending on the volume of business, after which the cash would be confirmed and banked; and that whenever it was impossible to bank the money, the same would be kept in a locked safe in the supermarket. Regarding the circumstances giving rise to this claim, it was the testimony of PW1that, since 27 December 2017was the election date for the 2007 General Elections, all the Plaintiff's branches were closed; and that the shops were re-opened on 28 December 2007, but closed early at 4. 30 p.m. because of the low customer turnout.

[10] PW1 further stated that, on the 29 December 2007 at about 8. 30 a.m., he was contacted by Alex Achebi, the Plaintiff's Supervisor at both the Foamat and Kenshop Branches, with the information that there were riots in Kondele Area of Kisumu Town, and that Ukwala Foamat had been broken into and goods were being looted therefrom. He added that he confirmed from the news reports on various Television Stations that Ukwala Foamat had actually been broken into by looters. He thereupon advised all the Managers of their various branches not to open the branches and to request the staff who had reported to work to go back home. In the meantime, he contacted G4S Securicor Companyand asked for their intervention, but was advised that no response could be made as the roads to Kisumu Town Centre had been blocked.

[11] PW1 testified that later in the afternoon, he got to learn that the Kenshop Branch had also been broken into and that the Foamat Branch had been set ablaze. Upon contacting the Officer Commanding Kisumu Station, one Mr. Wanyama, he was advised against visiting the scene for security reasons; and that it was not until later that evening that he was able to go to the scene in the company of Mr. Bharat D. Shah, a Manager at the Foamat Branch, and the Plaintiff's Accounts Assistant, Mr. Ashwini Patel, and some security guards. They found police officers at the scene trying to ward off looters from the Kenshop Supermarket.

[12] Describing the scene at the Kenshop Supermarket, PW1 testified that upon entering the shop, they found that the right side of the entrance had been broken into and most of the goods stolen from the shelves; he added that there were goods strewn all over the floor. The same situation obtained on the first and second floors; and that not even the Office Block was spared. They checked the computers and realized that the server was broken; the safe was lying on the floor with its handle broken but was otherwise intact; and scattered on the table were some fifty cents coins.

[13] It was the evidence of PW1 that following the incident, he contacted the Plaintiff's insurance agent, Mr. Vishal Taank of Image Insurance Brokers Limited, since the Plaintiff had taken out various insurance policies with the Defendant in respect of its various branches. That he was informed by Mr. Taank that an assessment would be carried out on 30 December 2007 and a report prepared. To that end, Mr. Taank gave him the contacts of Mr. Mahesh Mavji, an Assessor with a firm of independent loss adjusters known as McLarens Young International. He confirmed that he got in touch with Mr. Mavji and, on 31 December 2007, he accompanied him to the Plaintiff's affected branches for inspection. After the initial site visit, they were instructed to clear up the shops for stock-taking; which was done from 1 January 2008 for about four weeks. According to PW1, the Plaintiff suffered substantial loss and damage, assessed to be to the tune of Kshs. 181,593,208/=,made up as hereunder:

No. Particulars Amount (Kshs.)

1. Loss of stocks 98,079,039. 00

2. Furniture, Fitting and Fixtures (Kenshop) 16,592,943. 00

3. Electronic Equipment 11,053,093. 00

4. Cash 5,868,133. 00

5. Loss of Profit 50,000,000. 00

Total 181,593,208. 00

[14] The Plaintiff's evidence was that, although the Kenshop Branch reopened for business on 1 February 2008, they were able to recall only 28 members of staff as they had difficulties in re-stocking the shop on account of unpaid debts to its suppliers. Thus, as of 6 March 2009 when this suit was filed, only the Kenshop Branch was operational, given that the Foamat Branch was completely destroyed and required major renovations. It was thus the testimony of PW1 that, in spite of requests for compensation by the Defendant to enable it revamp its business, no payment was forthcoming; yet other insurance companies had no problem paying their insured customers for the losses suffered in similar circumstances.

[15] In support of the Plaintiff's case, PW1 relied on all the documents comprised in the Plaintiff's List and Bundle of Documents dated 5 April 2010 and filed on 23 June 2010 as well as the Supplementary Bundle of Documents dated 26 June 2014 and filed on 3 July 2014, and urged the Court to allow the Plaintiff's claim as prayed in the Plaint.

[16]The Plaintiff's second witness, Amon Keoga (PW2),was a security guard at the time, employed by Meka Securityin Kisumu. He stated that the was assigned day guarding duties at Ukwala Supermarket, Kenshop Branch, on the 11 December 2007; and that while on duty on the 29 December 2007before the shop was opened to the public, he saw a mob running towards the shop. He immediately pressed the alarm; and while their response team turned up promptly, they were unable to control the crowd. The riotous crowd was stoning cars and he could see that they were carrying goods from Ukwala Foamat Branch. He added that, out of fear for his own life he had to flee and returned to the supermarket at about 5. 00 p.m., only to find that it had been broken into and looted.

[17] On his part, Alexander Achebi Ahakulwa (PW3), the Plaintiff's Supervisor, stated that he joined Ukwala Supermarket in 2003 as a Shop Assistant; and that in 2007, he was stationed at the Foamat Branch as a Supervisor for both the Foamatand Kenshop Branches.He added that, for the two months preceding December 2007, the Foamat Branch had been undergoing renovations with a view of increasing shopping space. It was thus his evidence that by 24 December 2007, there was booming business and the two shops would operate up to 8. 00 p.m. He reiterated the evidence of PW1 that the shops were closed on 27 December 2007, which was the date for the General Elections; and that they reopened as usual on 28 December 2007.

[18] Regarding the events of 29 December 2007, PW3 testified that he left his house at 8. 30 a.m. for work but could not make it to town due to riots in Kondele Area. About the same time, he received a phone call from a colleague that there was some looting going on in town and that Ukwala Foamat Branch had been broken into and was being looted by a riotous mob. He thereupon relayed the information to the Plaintiff's director, Mr. Hitesh (PW1), who said he would notify the police. By about 2. 00 p.m., he got to learn from colleagues and from news reports over the radio that Ukwala Foamat Branch had been set ablaze. PW3 further stated that, when he joined PW1at the Ukwala Foamat Supermarket on 30 December 2007, he found him in the company of the police and a Manager, Mr. Bharat. The shop was still burning and therefore they could not gain access to it. On proceeding to the Kenshop Supermarket, they found the metal grille doors ripped open. The shop had been forcibly broken into and looted. They found security guards from Meka Security and G4S as well as some policemen inside the shop, which was in a mess, with damaged goods strewn all over the floor. He added that it took a very long time for the Foamat Branch to re-open; and that before this incident, there had never been any looting in the shops for any reason.

[19] Visal Taank (PW4),was the Plaintiff's fourth witness. He is a director and Chief Executive Officer of Image Brokers Limited, the company that had been procuring and managing the Plaintiff's insurance policies. He adopted the witness statement that he made on 14 February 2012 as his evidence; wherein he stated that, as of 2007 when the Plaintiff suffered the loss that is the subject of this suit, it had procured through his company the following insurance covers from the Defendant:

[a] Loss of Profit (Business Interruption)  - No. P/104/041/2004/30063/11

[b] Fire and Special Perils (Material damage)  - No. 104/040/11/33809/2003/08

[c] Electronic Equipment Insurance Policy  -       No. P/104/021/0224/2007/03

No. P/104/024/11/40413/2003/08

[d] Cash in Transit Policy    - No. 104/100/11/31099/2003/08

[20] It was the testimony of PW4that it was a fundamental term that of the policies aforestated that upon the Plaintiff paying the respective policy premiums, the Defendant would unconditionally indemnify and keep the Plaintiff indemnified against the risks covered under the policies; and would, upon demand and notification of any events covered under the policies, pay the Plaintiff in respect of any loss, damage or injury suffered in consequence of risks covered in the said policies. He confirmed that the Plaintiff had duly paid all the agreed insurance premium for the year 2007; and therefore, under the aforementioned policies, the Plaintiff was covered for that year in respect of the following risks:

[a] With respect to the Fire and Allied Perils Policy, it covered  all movable and immovable property located at particular  premises such as buildings, plant, machinery, furniture, fixtures,  fittings and other contents, stocks and stocks in process along with  goods held in transit or on commission, including stocks at  suppliers'/customers' premises, and machinery temporarily  removed from the premises for repairs. Also covered by this  policy was damage or loss caused by fire, lightning,  explosion/implosion aircraft and articles dropped therefrom,  impact damage by rail/road or animals, riot and strike, malicious  damage, landslide, storm, cyclone, typhoon, tempest, hurricane,  tornado, flood and inundation.

[b] With respect to Fire & Consequential Loss (Loss of Profit),  the  policy covered loss of profits following damage to business  premises or any part thereof.

[c] With respect to the Electronic Equipment Policy the loss  covered was any unforeseen and sudden physical loss or damage  of electronic equipment necessitating repair or replacement.

[d] With respect to the Cash in Transit Policy, the Plaintiff was  insured for loss of cash in direct transit, loss of cash in the premises  in cash tills, locked drawers and locked safe.

[21] PW4 further stated that, on 29 December 2007, he was informed by Mr. Hitesh Dhanani (PW1) that the Plaintiff's supermarkets in Kisumu had been broken into and that looting was ongoing. He verified the information from the media as the looting was being televised via the televisions and radio. He accordingly contacted the Defendant, and they in turn appointed the assessors, M/s McLarens Young International to assess the loss. The Assessor, Mr. Mahesh Mavji proceeded to Kisumuon 30 December 2007 to initiate the assessment process. PW4pointed out that the loss to the Plaintiff occurred on 29 December 2007 before the results of the Presidential Election was announced; and that the same was occasioned by looting and theft, and was therefore covered by the policies issued by the Defendant. According to him, the policies did not contain any exclusion clauses with regard to war, civil war, political risks or terrorism. His evidence was that what was excluded was loss occasioned by an organized group seeking to overthrow the government. He further stated that by a letter dated 7 January 2009, the Defendant wrote to Image Insurance Brokers Ltd indicating that all policies being issued or renewed with effect from 1 January 2009 would henceforth be endorsed with a "War, Civil War, Political Risks & Terrorism Exclusion Clause."It was therefore the testimony of PW4that the Defendant cannot rely on the said exclusion clauses to avoid liability herein, given that the Plaintiff's loss was occasioned by looting and theft.

[22]The Plaintiff's last witness wasDipesh Shah, PW5 herein. He is a director with VSC Consultants Ltd, and a member of the Association of Chartered Certified Accountants (ACCA). He stated that his company was appointed by the Plaintiff to compile and verify the claim for loss of assets which occurred to the Plaintiff on 29 December 2007. He carried out the assignment and prepared a report dated 23 October 2009which he produced herein and confirmed the loss as follows:

[a] Total Loss of Assets  - Kshs. 27,646,036. 00

[b] Loss of Stocks   - Kshs. 98,079,039. 00

[c] Loss of Cash   - Kshs.  5,868,133. 00

Total     - Kshs. 131,593,208. 00

[23]In its behalf, the Defendant calledDavid Freer (DW1),a self-employed Insurance Consultant based in London. He stated that, at the instance of the Defendant, he prepared a report in connection with this matter dated 23 April 2015, which he adopted and produced herein as an exhibit. He explained that the whole concept of terrorism cover came up after the September 11, 2001 terrorists attacks in the United States of America. That it was then that the insurance industry realized that they could not cope with the risks posed by terrorism. In his report, filed herein on 6 October 2015, he analyzed some of the exclusion clauses in the policies issued by the Defendant to the Plaintiff. He noted that the 3rd Policy for electronic equipment did not specifically talk about terrorism, but included malicious acts in connection with any political organization. He was of the view that the definition of what amounts to civil commotion is varied; and so he was not in a position to give an opinion on whether the incident that occurred in Kisumu amounts to civil commotion or not; and that this could only be determined upon a full review of all the relevant evidence.

[24]The foregoing being a summary of the evidence, and having given careful consideration to the pleadings, the evidence, the applicable law and the submissions made herein by Learned Counsel for the parties, I note that there is a preliminary issue emerging therefrom, namely, the argument by Mr. Munyu, Counsel for the Plaintiff, as to the admissibility of the expert evidence that was adduced by David Freer (DW1)on behalf of the Defendant. According to Mr. Munyu, the expert evidence by DW1 is wholly inadmissible and fails to meet the parameters of an expert. He relied on Black's Law Dictionary, 8th Edition definition as well as the following authorities in support of his argument that the said witness did not possess the requisite academic qualifications to be treated as an expert witness:

[a] Mutonyi vs. Republic [1982] eKLR;

[b] Shamas Charania vs. Harit Sheth t/a Harit Sheth Advocates [2007] eKLR;

[c] Scorpion Holdings Ltd vs. Lion Assurance Co. Ltd Civil Suit No. 221 of 2013 (a Ugandan authority);

[25] Mr. Amoko for the Defendant was however of the contention that in raising the objection, the Plaintiff is factually and legally mistaken; and that nowhere in the Mutonyi Case(supra) did the Court of Appeal even suggest that academic qualifications are the sine quo non of admissibility. Mr. Amoko instead directed the Court's attention to Section 48 of the Evidence Act, Chapter 80 of the Laws of Kenya and stressed that all that is required is special skills in the area of expertise. Accordingly, it was Mr. Amoko's argument that, although not having any academic qualifications, DW1 is an expert by virtue of his experience, which stems from 1964 to date, and spans the entire gamut of the insurance industry; and that, having handled insurance assessments of policies in connection with political risks, he is precisely the specialist that can render authoritative assistance to the Court in this matter.

[26] The definition of the word "expert" according to Black's Law Dictionary, 8th Editionis:

"A person who, through education or experience, has  developed skill or knowledge in a particular subject, so that  he or she may form an opinion that will assist the fact-finder."

Thus, the definition accords well with the text of Section 48 of the Evidence Act in terms of the pertinence of specific skill, whether derived from academic pursuits or experience. Hence, in Sarkar on Evidence, 10th Edition, the authors express the view that:

"An expert, in order to be competent as a witness, need not  have acquired his knowledge professionally; it is sufficient, so  far as the admissibility of the evidence goes, if he made a special study of the subject, or acquired a special experience  therein."

[27] This appears to be the tenor and effect of the authorities cited by the Plaintiff. For instance, in the Mutonyi Case, the Court of Appeal held that:

"Expert evidence is evidence given by a person skilled and experienced in some professional or special sphere of  knowledge of the conclusions he has reached on the basis of  his knowledge, from facts reported to him or discovered by him by tests, measurements and the like...Their duty is to furnish the judge or jury with the necessary scientific criteria for testing the accuracy of their conclusions, so as to enable  the judge or jury to form their own independent judgment by  the application of these criteria to the facts put in evidence."

[28] In his report filed herein on 6 October 2015, DW1 set out his career background in Paragraph 2 thereof. It is evident that he has been in the insurance industry as from 1964, when he started off at Halford, Henry & Montifiore Ltd, handling all aspects of Marine and Non-Marine claims. It is also evident that between 1976 and 1994, while working for the Corporation of Lloyds, he rose through the ranks to the position of the Chief Advisory Officer, and had occasion then to serve as the Secretary to the War & Financial Guarantee Committee, dealing with the underwriting of, inter alia, political risk business in the Lloyd's market. Between 1995 and 2010, he was working for HSBC Insurance Brokers as the Divisional Director, Political Risks; and his responsibilities included all aspects of broking and client contact for Political Risks and Trade Credit Insurance with clients based in the UK, North America, Europe, Middle East and Australia. As at the time of preparing his report, he was an Independent Reviewer for various Syndicates at Lloyds. Accordingly, I would agree with Mr. Amoko that DW1 does qualify as an expert witness form the range of experience he has under his belt. I would thus overrule Mr. Munyu'sobjection in this connection.

[29] From the evidence adduced herein, there is no dispute that the Plaintiff obtained policies from the Defendant as follows:

[a] The Fire and Special Perils Policy (Business Interruption)  vide Policy No. P/104/041/0441/2004/30063/11:A copy of the  said policy was produced herein at pages 1 to 10 of the Plaintiff's  Bundle of Documents filed on 23 June 2010. The parties are in  agreement that this policy covered the Plaintiff from perils  resulting in interruption or  interference of its business due to fire,  lightning, explosion, riots,  strikes, lock-outs of workers, as well as  damage from aircraft and other aerial devices or articles dropped  there from. There is no dispute that this policy excluded damage  or loss occasioned by  civil commotion assuming the proportion of  or amounting to a popular rising and acts of terrorism committed  by a person acting on behalf of or in connection with any  organization.

[b] The Fire and Special Perils Policy (Material Damage) No.  104/040/11/33809/2003/08:A copy of the policy was exhibited  at pages 11 to 24 of the Plaintiff's Bundle of Documents and pages 5  to 10 of the Defendant's Bundle of Documents. The parties are in  agreement that the scope of this cover was damage related to  stock, buildings, plant and  machinery due to fire, lightning,  explosion, riots, strikes, and lock-outs among others. There is  similarly, no dispute that the policy excluded damage occasioned  by acts of terrorism committed by a person or persons acting on  behalf of or in connection with any organization; civil commotion  assuming the proportions of or amounting to a popular rising; and  the malicious act of any person (whether or not such act is  committed in the course of disturbance of the public peace) not  being the wilful act of any rioter, striker or locked-out worker in  furtherance of a riot or strike or in resistance to a lock-out.

[c] The Plaintiff's Electronic Equipment Insurance Cover was  provided by the Defendant vide two policies, being Policy No.  P/104/021/0224/2007/2/03, which was exhibited at pages 25 to  35; and Policy No. P/104/024/11/40413/2003/08 at pages 36 to  45 of the of the Plaintiff's Bundle of Documents. There is no  disputation herein that, under these policies, the Plaintiff was  insured against any unforeseen and sudden physical loss or  damage of electronic equipment necessitating repair or  replacement. The policy documents show that these policies  excluded loss occasioned by invasion, civil war, nuclear related  loss, mutiny, riot, strike, civil commotion, a group of malicious  people acting on behalf of or in connection with any political  organization, conspiracy, confiscation, commandeering,  destruction or damage by order of any Government de jure or de  facto or by public authority; as well as wilful acts or wilful  negligence of the insured or its representatives.

[d] Finally, there is uncontroverted evidence that the Plaintiff  applied for and obtained a Money Insurance Cover from the  Defendant vide Policy No. 104/100/11/31099/2003/08, a copy of  which was exhibited at pages 103 to 114 of the Defendant's Bundle  of Documents; and that under this policy, the Plaintiff was insured  against the risk of loss of money, including cash and/or other  currency notes occasioned by robbery or theft or any other cause  whatsoever whilst in transit or whilst on the premises in cash tills,  in locked drawers or in locked safe. There is no dispute that the  policy excluded liability for, amongst others, any loss or damage  directly or indirectly, proximately or remotely occasioned by,  contributed by or arising out of or in connection with civil war,  strike, civil commotion, rebellion, military or usurped power. The  policy also excluded loss of money following the opening of locks,  safes and strong rooms using keys unless the keys were obtained  violently; or loss occasioned by collusion of the Plaintiff's  employees.

[30] There is further no disputation that following the General Elections that were held in Kenya on 27 December 2007, there erupted unprecedented violence in many parts of the country, following the announcement of the presidential election results on 30 December 2007. The Defendant produced herein extracts of the Report of the Commission of Inquiry into the Post Election Violence (CIPEV),as well as theKenya National Commission on Human Rights' Final Reportdated15 August 2008,entitledOn the Brink of the Precipice. Both reports confirm the evidence adduced herein by the Plaintiff that, in the case of Kisumu, incidents of violence and looting was reported in the region even before the announcement of the presidential election results. In this connection, it was reported by the CIPEV thus at page 177 of its Report:

"The Commission heard that the violence in Nyanza occurred  in 3 distinct phases. The first was directly related to the  context of elections and took place between 29 and 31  December 2007. It was characterized by demonstrations, riots,  acrimony and discontent. The second phase occurred in the  New Year and was reactionary apparently in protest against  what was viewed as excessive use of force by police and also  in response to calls for mass action by the ODM leadership  which lasted until mid January 2008. The third phase was  associated with two unrelated events, first the targeting of Luo  by Kikuyu gangs in Nakuru and Naivasha leading to an influx  of Luo IDPs from outside Nyanza..."

[31] At page 159 of the Final Report of the Kenya National Commission on Human Rights, it was reported thus:

"The delay in announcement of the presidential elections  results as well as widespread rumours of election rigging  heightened the tension in the region...the controversial  declaration of Mwai Kibaki as the winner of the presidential  vote on December 30 2007 sparked off violence throughout the  region ... Nyanza Province witnessed violence in the months of  December 2007, January, February and March 2008. Initial  violence occurred around 29 December 2007 ...There was  widespread looting and destruction of property belonging to  persons perceived not to be indigenous to the region ("foreign  communities")...The first phase of the violence was  precipitated by delay in announcement of the presidential  results as well as the announcement of Mwai Kibaki as the  President and this was largely between 29 December 2007 and  10 January 2008. The second phase of the violence was  between 15 and 17 January 2008, which is also the period when  ODM called for mass protests. The mass protests had been  declared illegal by the police. The third phase of violence was  catalyzed by external factors such as the influx of IDPs from  areas including Naivasha and Central Province, who  recounted harrowing stories of their ordeal in the hands of  murderous gangs, as well as the deaths of ODM politicians  Mugabe Were the MP for Embakasi and David Kimutai Too  the MP for Ainamoi..."

[32] The Plaintiff's contention that it suffered damage as a result of the riots and looting that occurred on the 29 December 2007,is similarly uncontroverted. There is ample evidence in this regard from the evidence of PW1 - PW5; and to buttress that evidence, a set of documents were produced herein, including:

[a] A police abstract dated 8 January 2008

[b] A photo album showing a set of photographs taken at the   Plaintiff's premises;

[c] Correspondence between the Plaintiff and the Defendant,   Loss Adjusters, McLarens Young International;

[d] Plaintiff's advertisement targeting its creditors, demand  letters from creditors, and select newspaper extracts of Financial  Standard and Daily Nation for the period between 8 January 2008  and 10 February 2009; all of which confirm that the Plaintiff's  supermarkets were broken into and property looted and/or  destroyed by a riotous mob on 29 December 2007.

[33] In connection with the Ukwala Supermarket incident, the KNCHR Report,which, as has been pointed out herein above, was produced by the Defendant as one of its exhibits, stated that:

"The mention of Ukwala Supermarket evokes images of badly  destroyed and burnt property in Kisumu Town. The event was  widely publicized in local and international media and has  come to represent the damage that was occasioned to property  perpetrated against so-called "foreign communities". The  business suffered an estimated loss of about Kshs 150  million..."

[34]Thus, the Plaintiff has demonstrated, to the requisite standard, that its two outlets in Kisumu, namely the Ukwala Foamat Supermarketand the Kenshop Supermarket, were broken into and property looted therefrom by a riotous mob. In the case of the former, the supermarket was set ablaze thereafter and thus completely destroyed. The evidence being wholly unrebutted, it is therefore indubitable that the Plaintiff's property, equipment and money was stolen and destroyed by fire and otherwise, thereby occasioning it immense loss. It is also unquestionable that this occurred during the subsistence of the insurance policies aforementioned as proved by the evidence of PW1andPW2 and the Renewal Certificates exhibited at pages 46 to 62 of the Plaintiff's Bundle of Documents.

[35] As was required of the Plaintiff by the terms of the Policies, PW1 promptly made a report of the occurrence to PW4 as the agent for the Defendant and, while not expressly denying that the damage and loss complained of was indeed suffered by the Plaintiff, the Defendant averred, at Paragraphs 6, 7 and 7A of its Defence, that the occurrence of 29 December 2007 was due to civil commotion assuming the proportion or amounting to a popular rising or acts of terrorism; and were part of the general effects of the Post Election Violence experienced in Kenya at the conclusion of the 2007 General Elections.

[36] In the light of the foregoing, the issues that remain for my determination, having looked at the separate Lists of Issues filed herein by the Plaintiff on 4 November 2009 and the Defendant on 20 May 2010, can be summarized as follows:

[a] Whether the loss suffered by the Plaintiff was occasioned by  acts falling within the exclusion clauses contained in the said  insurance policies; and if not,

[b] Whether the Plaintiff did suffer loss in the sum of Kshs.  181,593,208/= as claimed in the Plaint; and

[c] Whether the Plaintiff is entitled to interest on the said sum of  Kshs. 181,593,208/= and costs.

[a] On whether the Plaintiff's loss was attributable to    events excluded by the respective policies:

[37]Having reviewed the policies aforementioned and the exclusion clauses therein, it is evident that the common thread running through them is the contention by the Defendant that the loss and damage suffered by the Plaintiff was specifically and expressly excluded. Under the Fire and Special Perils (Business Interruption) Policy and the Fire and Special Perils (Material Damage) Policy, the exclusion clauses had to do with damage occasioned by civil commotion assuming the proportions of or amounting to a popular rising; and acts of terrorism committed by a person or persons acting on behalf of or in connection with any organization. In the latter case, the exclusion clauses included the malicious act of any person (whether or not such act is committed in the course of disturbance of the public peace) not being the wilful act of any rioter, striker or locked-out worker in furtherance of a riot or a strike or in resistance to a lock-out.

[38] Similarly, the Electronic Equipment and Money Policies had exclusion clauses that exempted civil war, nuclear related loss, mutiny, riot, strike, civil commotion, acts of malicious people or wilful negligence or collusion on the part of the Insured or its agents. According to Counsel for the Defendant, there is no other conclusion possible other than that the events that took place on 29 December 2007 in Kisumu, involving the Plaintiff's two supermarkets, were part of the Post Election Violence that occurred in the wake of the disputed outcome of the General Elections of 2007, and are therefore excluded as (a) civil commotion assuming the proportion of or amounting to a popular uprising; and (b) acts of terrorism as defined under the policies.

[39] The Plaintiff's Counsel referred the Court to the case of Spinney's [1948], Spinney's Centres S.A.L and Michel Doumet Joseph Doumet and Distributors and Agencies S.A.L vs. Royal Insurance Co. Ltd [1980] 1 Lloyd's Rep 406 wherein the phrase "civil commotion assuming the proportion of or amounting to a popular uprising" was explained as follows:

"It still remains to be considered whether the civil commotion  assumed the proportions of or amounted to a popular rising.  The latter words have no recognized technical meaning. Often  they must mean the same as "insurrection". Where there is a  distinction, it probably lies in the greater spontaneity and  looser organization of a popular rising. But I would still be  inclined to consider that there must be some unanimity of  purpose among those participating, and also that the purpose  must involve the displacement of the government. I doubt  whether a violent attack by one section of the population on the  other on grounds, for example, of religion or race, would be  described as a rising. Adopting this interpretation, I would not  say that the disturbances in Lebanon amounted to a popular  rising. But were they "assuming the proportions" of such a  rising. The word "proportions" is sometimes used to mean  shape or configuration. I do not think that it has this sense  here. To my mind, the word signifies "dimensions". So one  must identify the dimensions of a popular rising. This cannot  be done precisely. All one can say is that it must involve a  really substantial proportion of the populace, although  obviously not all the population need participate, and that  there should be tumult and violence on a large scale. On the  findings which I have made, the events in Lebanon satisfied  this test, and the exception therefore applies."

[40] Counsel further submitted that, given the definition of "insurrection" in case law, such as in National Oil Corporation of Zimbabwe (Pte) Limited vs. Sturge [1991] 2 Lloyd's Reply. 281; Pan American World Airways Inc. vs. The Aetna Casualty and Surety co. and Others [1974] 1 Lloyd's Rep. 207; and Levy vs. Assicurazioni Generali [1940] 3 AllER 427, to mean a violent uprising with the main object of overthrowing the government, the events that occurred in Kisumu on 29 December 2007 cannot be classified as civil war or civil commotion assuming the proportion of a popular uprising.

[41] The evidence adduced herein by the Plaintiff was to the effect that the looting and damage that affected their two supermarkets in Kisumutook place on 29 December 2007, before the announcement of the presidential election results; and that the same was perpetrated by the general members of the public who took advantage of the security lapse during the period, granted that most police officers had been deployed on election duties. PW1 in particular was of the conviction that, to the best of his knowledge and having resided and done business in Kisumufor a considerable period of time, the looting and destruction was spontaneous. In cross-examination, PW1 conceded that since large businesses in Kisumu were predominantly ran by Asian businessmen, they were the targets of looters. He however added that this was purely coincidental; and that the same would have happened had the same businesses been owned by members of the Luo community, who, as a matter of local notoriety, are the majority of the residents in the area.

[42] In similar vein, PW2 gave evidence that the events of 29 December 2007 were riots by members of the general public and were not organized events as there were no ring-leaders leading the riots. According to him the looting in the shops was unplanned and uncoordinated. He added that may other shops in addition to the Plaintiff's supermarkets were broken into and looted. The same evidence was given by PW3. In the light of the Plaintiff's evidence as to the nature of events pertaining to its loss and damage, it was the responsibility of the Defendant to then demonstrate by cogent evidence that the events were otherwise; and in particular, that they fell within the exceptions set out in the respective policies in issue.

[43] The Defendant, on its part, called only one witness as DW1, an expert, who had no idea as to how the events in Kisumu unfolded; and who admitted that he did not know what happened in Kisumu; and while it is noteworthy that he made an attempt to define "terrorism" and "civil commotion" in his report dated 23 April 2015,he did not provide the court with any clear-cut elucidation or enlightenment as would have been expected of an expert. His report was commissioned by the firm of Oraro & Company Advocates,and it shows that specific questions were put to him in his capacity as an expert, seeking his expert opinion as to the meaning and effect of the exclusion clauses in the contracts of insurance. An excerpt of his response is as follows:

"Whilst on the face of it the events of 29 December 2007 may  not initially appear to be terroristic in nature and I do not  believe the Kenyan authorities ever declared the events of  2007/8 to be an act of terrorism, a strict interpretation of the  definition in the fire policy may exclude the loss in question.  However, in order to make such a determination on whether  the situation that occurred in Kisumu falls within the terrorism  exclusion a full review of all the relevant evidence would need  to be undertaken."

[44]In respect of the definition of "civil commotion" DW1's report states as follows at pages 4 and 5 thereof:

"Many insurance policies define civil commotion and one  such definition is "means a substantial violent uprising by a  large number of persons assembled together and acting with  common purpose or intent. Lord Mansfield defines a civil  commotion to be "an insurrection of the people for general  purposes, though it may not amount to rebellion where there is  an usurped power. Civil commotion refers to a public revolt by  a large number of people who cause harm to people or  property. It is a revolt by a large number of people for general  purposes and it usually involves many more people than a riot.  Civil commotion is a kind of civil disobedience movement by  the people which is serious and prolonged compared to a riot."

[45] In cross-examination, DW1 conceded that he was not in a position to say whether the damage occasioned in Kisumu would fall within the definition of terrorism as was set out on pages 4 and 5 of his report. He conceded as much in respect of the definition of civil commotion; in effect contradicting the instructions he received, as set out at paragraph 4 of his report on page 2, by stating categorically that:

"I was not asked to give an expert opinion on whether what  occurred in Kisumu amounted to terrorism or civil  commotion...I cannot say whether this exclusion applies to the  facts of this case or not."

[46] Moreover, the evidence adduced by the Plaintiff's witness does show that the looting and destruction was not prolonged in the sense referred to in DW1's report. It did not overflow to the following day or days, thus confirming the Plaintiff's contention that the incidents were spontaneous. In the KNCHR Report, this is confirmed as follows:

"The information collected by the KNCHR suggests that the  first phase of violence had a relatively lower level of  organization..."

[47] Needless to say that the burden of proof is on he who alleges. Section 109 of the Evidence Act, Chapter 80 of the Laws of Kenya, is explicit that:

"The burden of proof as to any particular fact lies on the  person who wishes the court to believe in its existence..."

Indeed in the Spinney's Case (supra) the question of how the Court should apply the reverse burden clause came up for consideration, and it was held thus:

"...the insurers cannot bring the clause into play simply by  asserting that the loss was excluded by a particular exception,  and challenging the insured to prove the contrary. They must  produce evidence from which i can reasonably be argued that  (a) a state of affairs existed or an event occurred falling within  an exception, and (b) the excepted peril directly or indirectly  caused the loss. It is only when an arguable case of this nature  is made out that the insured is required to disprove it..."

[48] Thus, it was incumbent upon the Defendant to demonstrate, on a balance of probabilities, that the loss and damage suffered by the Plaintiff was attributable to civil war, or civil commotion assuming the proportion of a popular uprising. Hence, the evidence that was adduced by the Plaintiff, which remains uncontroverted, is that the loss was occasioned by sporadic activities of looters who were acting for personal gain and not for any organized cause, let alone the cause of overthrowing the Government. Similarly, as was conceded by the DW1, it cannot be said that the loss was an act of terrorism, granted that the looting was neither occasioned by an organized group, nor was any material laid before the Court to show that it was done for the purpose of causing fear on a section of the public within the purview of the definition of 'terrorism' in the said policies. Needless to say that for the purpose of this suit, the letter of 7 January 2009 and the revised definition of terrorism therein is immaterial, as it was inapplicable to the subject policies.

[49] Accordingly, the Defendant having failed to prove that the events complained of by the Plaintiff fall outside the scope of cover envisaged by the respective insurance policies taken by the Plaintiff, I find and hold that the said loss and damage is indemnifiable by the Defendant under the respective policies.

[b] On whether the Plaintiff did suffer loss in the sum of   Kshs. 181,593,208/= as claimed in the Plaint:

[50] PW5,who carried out the loss verification exercise, testified that the exercise was undertaken between 28 January 2008 and 28 March 2008. According to his report dated 23 October 2009, the Plaintiff's loss was quantified as follows:

[a] Total Loss of Assets  - Kshs. 27,646,036. 00

[b] Loss of Stocks   - Kshs. 98,079,039. 00

[c] Loss of Cash   - Kshs.  5,868,133. 00

Total     - Kshs. 131,593,208. 00

[51] PW5 explained that the figures were arrived at by analyzing the Plaintiff's audited accounts for the period 2005to2007, by taking the opening balances, adding the assets bought in the year and comparing the same with the invoices for the purchases. He stated that he could not verify the existence of the actual assets as most of the assets had been looted or burnt down. As for the stocks, he used the Gross Profit reported in 2006 of 11. 57% and the VAT returns for 2007 (at pages 11-22 of the Plaintiff's Supplementary Bundle of Documents) to calculate the sales and purchases to obtain the theoretical quantum of stocks. This sum was adjusted with the value of stocks recovered from at the Kenshop Branch and stores to arrive at the approximate stocks lost in the incident. As for the Loss of Cash, worked out at Kshs. 5,868,133/=, PW5 explained that the aforesaid sum was arrived at after a verification of the Cash Book for the period between 1stand 26th December 2007 against the sales, expenses paid and the banking made in the period to get a cash balance as at 26 December 2007 of Kshs. 11,118,133/=. From this amount he deducted the cash recovered on 2 January 2008 of Kshs. 5,250,000/=to arrive at the amount of cash lost of Kshs. 5,868,133/=.From the evidence of PW1, there wasa loss of profits component that was capped atKshs. 50,000,000/=,thus making the total of Kshs. 181,593,208/=.

[52]In addition to the foregoing, the Plaintiff adduced evidence through PW1 and PW3 that upon the occurrence being reported to it, the Defendant instructed the firm of Loss Adjusters, McLarens Young International Limited, to conduct an assessment with a view of determining the extent of the losses suffered by the Plaintiff; and that an Assessor, Mr. Mahesh Mavji, was dispatched to Kisumu; and that he visited the two affected supermarkets, took photographs at the scene and questioned witnesses, including guards, in connection with the occurrence. Again, the evidence of the Plaintiff is entirely uncontroverted; and there is no indication that the loss adjusters prepared a report as envisaged by Section 203(2) of the Insurance Act, Chapter 487 of the Laws of Kenya.

[53] In Safarilink Aviation Limited vs. Trident Aviation Kenya Limited & Another [2015] eKLR, Mabeya, J. expressed the view that:

"...failure to rebut evidence tendered by one party leaves the  court with no option but to draw an inference that the facts as  presented are true..."

The same finding was made in Linus Nganga Kiongo & 3 Others vs. Town Council of Kikuyu [2012] eKLRand Trust Bank Limited vs. Paramount Universal Bank Limited & 2 Others Nairobi (Milimani) HCCC No. 1243 of 200l. The case of Kenya Akiba Micro Financing Limited vs. Exekiel Chebii & 14 Others [2012] eKLR was also relied on by the Plaintiff, for the proposition that where a party has custody or is in control of evidence which that party fails or refuses to tender or produce, the Court is entitled to make an adverse inference that if such evidence was produced, it would be adverse to such a party. Accordingly, in the absence of evidence to controvert the quantum of loss as pleaded and proved by the Plaintiff herein, the Court is satisfied that the Plaintiff has shown on a balance of probabilities that it is entitled to Kshs. 181,593,208/= as prayed for in the Plaint.

[c] On Interest and Costs:

[54] In its written submissions, Counsel for the Plaintiff pitched a case for the payment of interest at court rate of 14% per annum, contending that the claim is a liquidated one for Kshs. 181,593,208/= and that the Plaintiff has been deprived of the said sum since 31 January 2008, when the said amount became due. Counsel also relied on Section 26 of the Civil Procedure Act, Chapter 21 of the Laws of Kenya , as well as the case of Francis Joseph Kamau Ichatha vs. Housing Finance Company of Kenya Limited [2015] eKLR to support the claim to interest from 31 January 2008 before the filing of this suit.

[55] No doubt, the Court does have the discretion to award interest, including interest on sums found due to a plaintiff, from such period as appropriate. In Dipak Emporium vs. Bond's Clothing [1973] EA 553, it was held that:

"The court's right to award interest is based on Section 26(1) of  the Civil Procedure Act which states 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 prior to  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 payment or to such earlier date as the court  thinks fit ... Where a person is entitled to a liquidated amount  or to specific goods and has been deprived of them through the  wrongful act of another person, he should be awarded interest  from the date of filing suit. Where, however, damages have to  be assessed by the court, the right to those damages does not  arise until they are assessed and therefore interest is only  given from the date of judgment."

[56]Thus in the Ichatha Case (supra), Odunga, J. had occasion to summarize the three instances provided for in Section 26(2)of the Civil Procedure Act in which interest is awardable thus:

[a] Interest adjudged on the principal sum from any period prior  to the institution of the suit. Here the court must first decide on the  evidence, the question of awardability of this interest and then on  the rate at which it is to be awarded if any;

[b] Interest on the principal sum adjudged from the date of filing  the suit to the date of the decree, where, the court decides at its  discretion, the rate of interest to be awarded; and

[c] Interest on the aggregate sum so adjudged from the date of  decree to date of payment in full.

[57] Thus, on the awardability of interest herein, Counsel for the Defendant urged the Court to note that this was only asked for in the Plaintiff's written submissions and was not pleaded in the Plaint. On the authority of Nairobi city Council vs. Thabiti Enterprises Ltd [1995-98] 2 EA 231, Counsel urged the Court to find that no interest is recoverable in this case. A look at the prayers in the Plaint confirms that interest on the principal sum was not expressly prayed for. The prayers, as pleaded read:

"WHEREFORE the Plaintiff prays for judgment against the Defendant for:-

a) The sum of Kshs. 181,593,208. 00 from the 31st January 2008  until payment in full.

b) Costs of this suit plus interest at court rates till payment in full.

c) Such other further relief that this Honourable Court may deem fit to grant."

[58] Clearly therefore, the Plaintiff is not entitled to interest on the principal sum, for the reason that it did not pray for it. In Nairobi City Council Case(supra), it was held that:

"It is now settled law that the only way to raise issues for determination by the Court is through pleadings and it is only  then that a claimant will be allowed to proceed to prove them."

[59] As for costs, the proviso to Section 27(1) of the Civil Procedure Act is explicit that costs shall follow the event, the event herein being that the Plaintiff is successful against the Defendant in respect of its claim for Kshs. 181,593,208/=. Similarly, subsection (2) of Section 27, Civil Procedure Rules, recognizes that interest on costs is awardable at any rate not exceeding 14% per annum.

[60] In the result, judgment is hereby entered for the Plaintiff in the sum of Kshs. 181,593,208/= together with costs of the suit and interest on costs as prayed for in the Plaint dated 10 February, 2009.

It is so ordered.

DATED, SIGNED AND DELIVERED AT NAIROBI THIS 17TH DAY OF NOVEMBER 2017

OLGA SEWE

JUDGE