Apa Insurance Limited v Britind Industries Limited
The bottom line
#Kenya's Court of Appeal confirmed insurers must stick to their original reasons for rejecting a claim, and can't later invent new ones.
What this practically means
#Executive summary
#Key legal issues
#Whether the insured was bound by, and the insurer confined to, the reasons given in the declination letter
The non-disclosure-of-ownership ground, absent from the declination letter and not pleaded, is an afterthought and cannot sustain voiding of the policy.
The court reproduced the entire letter of 17th March 2016 and observed that it raised only the allegation of deliberate fire, never ownership of the premises. Since the supposed misrepresentation was neither communicated at declination nor pleaded in the defence, but surfaced only in submissions, the insurer could not rely on it. The trial court was held to have correctly confined the insurer to its stated reasons.
Whether the insured or its director caused or connived at the fire (arson)
The insurer failed to discharge the elevated burden of proving arson by the insured; the appeal on liability fails.
The court re-evaluated the evidence as a first appeal. Britind's witnesses placed the director away from the premises when the fire began; the only contrary evidence was a statement and affidavit of PW7 which he recanted, alleging he was plied with alcohol and money by the investigator. Asserting arson was asserting criminal conduct, requiring proof higher than a balance of probability. The expert opinion that an 'internal accomplice' was involved was speculative, and the investigator's later M-Pesa payment to PW7 undermined his impartiality.
Quantum: the correct measure of indemnity under the fire policy
Damages are measured by the value of the insured items at the time of the fire, not the sum insured or an inception valuation; the award was reduced to Kshs.58,608,224.00.
The trial court erred by asking whether the insured was entitled to the whole sum insured. The correct approach, set out in the contract, is to estimate the value of the property at the time of destruction, or the amount of damage where partial, subject to policy limits. The court reduced plant and machinery to Kshs.13,702,341 allowing for depreciation, accepted the loss adjuster's raw materials figure, allowed only Kshs.100,000 for furniture for want of strict proof, and disallowed a separate electricals claim to avoid double compensation.
Weight to be given to the insurer's loss adjuster's report versus the insured's expert evidence
The insurer's loss adjuster's underlying expert reports were not produced and his experts did not testify, whereas Britind's experts testified and defended their opinions; the adjuster's assessment carried little weight.
The court contrasted Britind's structural engineer and quantity surveyor, who produced reports, gave evidence and were hardly challenged, with the insurer's adjuster who relied on reports of experts who never testified. Where a report's authors are not called, the report has diminished probative value, and the adjuster's arbitrary apportionments (e.g. Kshs.100,000 for furniture) were accepted only where the insured failed strict proof.
The duty of an insurance investigator and the effect of improper contact with witnesses
The investigator's payments and hospitality to a key witness undermined his impartiality, even if not amounting to proven bribery.
Although there was insufficient evidence to prove Britind's allegation of attempted compromise, DW4 conceded sending money by M-Pesa to PW7 long after the impugned statement and affidavit. Even viewing the contact as innocent, it did not help the investigator shake off the accusation of lack of impartiality, and the court admonished that he 'should have known better'.
Legal principles established
#- An insurer is bound by, and confined to, the reasons it gave in its letter of declination and cannot justify repudiation on grounds raised later in pleadings or submissions.
- An allegation that the insured committed arson (criminal conduct) must be proved to a standard higher than the balance of probability, though not as high as beyond reasonable doubt.
- Under a fire policy, indemnity is measured by the value of the insured items at the time of the insured event, and where damage is partial, the value of the damaged materials, subject to the policy limits.
- Double recovery is impermissible: sums already included in a bill of quantities for reconstruction cannot be claimed again under a separate head.
Court orders
#- 1.Appeal dismissed on liability
- 2.Appeal allowed partially on quantum; special damages reduced from Kshs.82,333,324.78 to Kshs.58,608,224.00
- 3.Interest on the special damages at court rate from the date the suit was filed until payment in full
- 4.Each party to bear its own costs of the appeal
- On appeal from
- High Court of Kenya
- Not stated in the judgment
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction (the judgment describes it as 'a first appeal'); no specific constitutional or statutory provision is cited in the judgment.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Apa Insurance Limited v Britind Industries Limited", Case Analysis (2025). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/1602/eng@2025-10-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.