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DP Ruto Firm To Be Auctioned Over Sh19 Million Debt

Court dispute started in 2018 over breach of insurance contract by failing to compensate a client

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Deputy President and Kenya Kwanza coalition presidential aspirant William Ruto has a little problem to deal with in his backyard even as campaigns for the presidency gain momentum. Amaco, insurance company linked to him, is just steps away from being auctioned over a Ksh19 million debt owed to a non-governmental organization after its appeal against a magistrate’s ruling was time-barred.

This is the latest setback to hit the insurer which has been fightìng several attempts to have it liquidated. The High Court in 2020 sanctioned the winding up of the 24-year-old firm following a petition filed by six people.

In the current case, the Africa Merchant Assurance Company had asked the High Court to stop Mama Rael Memorial Foundation from demanding payment of the Ksh19 million or auctioning the assets pending the determination of an appeal.

Amaco had told Justice Dorah Chepkwony that it had filed an “arguable” appeal against a magistrate’s ruling dated May 23, 2019, which allowed the Foundation to demand the amount.

This now means the NGO can go ahead and auction the company, making it the latest insurer in recent months to come into trouble after Resolution which collapsed with Sh6.6 billion in client’s cash.

The insurance firm also wanted the High Court to allow it to change its advocates from Ong’anda & Associates Advocates to Kihima & Koech Advocates. In addition, it wanted its late appeal against the ruling to be deemed as properly filed.

But Justice Chepkwony dismissed the request saying Amaco failed to offer a substantive explanation for the delay in filing the request to halt the exécution of the magistrate’s ruling.

Read Also >> Resolution Insurance Goes Under With Sh6B Client Cash

“The ruling in the lower court which Amaco wishes to appeal against was rendered on May 23, 2019, and the application (for stay) was filed on January 31, 2022. This was beyond the requirement of 30 days as provided for under the Civil Procedure Act,” said Justice Chepkwony.

In the absence of a good explanation, the court said it could not exercise its powers in favour of Amaco as there was an inordinate delay in applying. “Mama Rael Memorial Foundation, who is a successful party, should not be denied the opportunity to enjoy the fruits of its judgment,” said the judge.

She added that Amaco did not prove it has an arguable appeal or one that had high chances of success. The insurance firm had stated that it stood to suffer substantial loss if the execution of the court orders proceeded.

Security compliance

The court dispute started in 2018 and stemmed from Amaco’s breach of an insurance contract by failing to compensate the Foundation its dues. Court papers indicate that the Foundation had entered into a contractor’s Performance Bond agreement with Amaco in March 2016.

The main term and obligation of Amaco in the agreement was to guarantee a sum of Ksh10.5 million as security for compliance with another agreement the Foundation had with a construction company, Newspace creators Ltd.

The construction firm undertook to complete the construction of the Foundation’s premises within seven months which it failed to perform. This prompted the Foundation to serve the contractor with a default notice.

It said Amaco was under legal and contractual obligation to honour the terms of the agreement by paying the guaranteed amount upon the contractor’s failure to finish the work. The magistrate court ruled in favour of the Foundation and awarded it the guaranteed amounts plus interest at 12 percent per annum. (Reporting by Business Daily)

Next >> DP William Ruto’s Wealth At The NSE Held In Safaricom And KQ

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