The owners of Pioneer House on Moi Avenue have lost a bid to be paid Sh117 million by two insurance companies over the damages to the building that was caused by the August 7, 1998 bomb blast.
Justice Wilfrida Okwany dismissed the claim by Pioneer Holdings (Africa) Ltd, saying the destruction was an act of terrorism, which was not covered by the insurance policy between the owners and Jubilee Insurance and collapsed Concord Insurance.
Evidence tendered in court showed that Pioneer Holdings purchased a policy in 1995 where Jubilee and Concord were to compensate it at 70 percent and 30 percent, receptively in case of damage caused by fire, explosion, riot, strike, and malicious damage.
“I find that the defendants provided sufficient evidence to demonstrate that the activities that led to the explosion at the American Embassy Building whose effect spilled over and caused damage to the plaintiff’s Pioneer House, were terrorism-related,” the judge said.
The twin blast caused by Al-Qaeda, in Dar es Salaam and Nairobi led to the death of 250 people and injured more than 5,000 in the two cities.
Pioneer had claimed that following the blast, an engineer conducted structural integrity on the building and assessed the damage at Sh117.9 million. The building owners wrote to the two underwriters demanding liability in 1998.
The court was also told that the owners got a grant from the American embassy of Sh22.9 million for the damages suffered but Pioneer said it was not a substitute for the insurance claim.
In her judgment, Justice Okwany noted that the insurance policy was still in place when the blast occurred but added that Pioneer signed a clause that excluded terrorism acts from the policy.
“The defendant however repudiated liability based on an alleged exclusion clause in the insurance policy that excluded the defendants’ liability under the insurance contract if the explosion, which caused the loss, was occasioned by acts of terrorism,” the judge said.
She said the explosion cannot be equated to a normal explosion covered under the insurance policy.
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