' Introduction
1. By way of Plaint dated 25th September 2019, International Air Transport Association (IATA) and Saham Assurance Company Kenya Limited (formerly Mercantile Insurance) (together “the Plaintiffs”) sued George Town Travel & Tours Limited (“the 1st Defendant”), George Mwangi (the 2nd Defendant) and Damaris Njeri (the 3rd Defendant) for the recovery of Kshs. 3,654,362.95 and USD 463,999.60 together with interest at court rates until payment in full, full indemnity costs and further or other relief.
2. The Plaintiffs’ case is that the 1st Defendant, George Town Travel & Tours Limited, was appointed as an accredited agent under a Passenger Sales Agency Agreement (PSA) dated 17th September 2003, by which it was authorized to sell airline tickets on behalf of IATA member carriers and was obliged under Clause 7.2 of the PSA to remit all proceeds of such sales to the carriers. However, contrary to contrary to the agreement, the 1st Defendant defaulted in remitting proceeds sales for the months of July and August 2018.
3. It is further the Plaintiffs’ case that following the default by the 1st Defendant, the 2nd Plaintiff, Saham Assurance Company Kenya Limited, indemnified IATA and settled the claim under the insurance policy issued pursuant to IATA rules, thereby entitling them to pursue for recovery from the Defendants.
4. The Plaintiffs further contend that the 2nd and 3rd Defendants had executed Deeds of Indemnity 14th August 2017 in favour of Saham Assurance, by which they undertook to indemnify Saham against any losses arising from default by the 1st Defendant, thereby rendering them jointly and severally liable.
5. The Defendants opposed the claim vide a Statement of Defence filed on 22nd October 2010, denying indebtedness to the Plaintiffs in the Sum of USD 463,990/= and Kshs.3,654,362.93 as alleged.
Hearing
6. At the hearing the Plaintiffs called one witness, Ms. Agnes Mucuha, who adopted her witness statement dated 23rd February 2024 as her evidence in chief. The witness also produced in evidence the documents contained in her list of documents dated the same date, but filed in Court on 25th February 2024.
7. The Defendants did not attend the hearing, called no witnesses and produced no documents despite being served. The matter therefore proceeded for hearing based solely on the evidence and submissions of the Plaintiffs.
Plaintiff’s Written Submissions
8. At the conclusion of the hearing, the court gave directions on the filing of submissions and the Plaintiffs, through the law firm of Wamae & Allen LLP filed their submissions dated 15th April 2025. Again, no submissions were filed on behalf of the Defendants.
9. Counsel for the Plaintiffs submitted that the PSA is a standard contract executed between IATA Member Airlines and the 1st Defendant. It expressly establishes an agency relationship, governed by uniform global rules administered by IATA.
10. It was further the Counsel’s submissions that under Clauses 3.1–3.2, 7.1–7.3, and 14.1–14.2 of the PSA, the 1st Defendant was authorized to sell air transport on behalf of airlines; required to hold all monies collected in trust for the carriers; obligated to remit proceeds through the Billing and Settlement Plan (BSP); keep proper accounts; and obliged to return unused ticket stock upon termination.
11. Counsel claimed that the 1st Defendant breached these obligations by: collecting ticket sales over several months; failing to remit the amounts; continuing to issue tickets despite being placed under financial review; and failing to provide reconciliation statements.
12. Concerning Deeds of Indemnity, it was submitted that the 2nd and 3rd Defendants voluntarily executed the Deeds of Indemnity, guaranteeing the obligations of the 1st Defendant. Counsel cited among others Yeoman Credit Ltd v Latter [1961] 1 WLR 828 and Muthoni Kihara v Housing Finance Co. of Kenya, emphasizing that unlike guarantee, an indemnity creates unconditional, primary, continuing obligations, thereby making the 2nd and 3rd Defendants jointly and severally liable.
13. Regarding Subrogation, it was submitted on behalf of the Plaintiffs that the 2nd Plaintiff having compensated IATA under the financial security arrangement it became subrogated to IATA’s rights. Counsel relied on among others, the case of IATA v Pinnacle Tours & Travel Ltd (HCCC No. 15/2015) to support the argument that under insurance law, the principle is that the insurer, having paid the insured’s loss, is entitled to recover the amount from the party responsible.
14. Finally, the Plaintiffs, citing several authorities including the decision in the case of Trust Bank Ltd v Paramount Universal Bank Ltd & 2 Others (2009) eKLR, argued that since the Defendants produced no evidence, their defence amounts to mere denials which carry no weight. Counsel submitted that since the Plaintiffs’ evidence was uncontroverted, the Court should enter judgment as prayed.
Analysis & Determination
15. I have carefully considered the pleadings, the evidence tendered by the Plaintiffs at the hearing, and the submissions filed on behalf of the Plaintiffs. The issues that arise for determination are: -
i. Whether the Plaintiffs have established that the Defendants were in breach of the various contracts entered into with them.
ii. Whether the Plaintiffs are entitled to the prayers sought.
Whether the Plaintiffs proved breach
16. The Defendants neither appeared at the hearing nor produced any witness statements or documents. The Plaintiffs’ evidence therefore stands uncontroverted. This notwithstanding, the Plaintiffs are still bound to prove their case even where no evidence was tendered. The duty to prove was stated by J. B. Havelock in the case of Rosaline Mary Kahumbu v National Bank of Kenya Ltd [2014] eKLR, as follows: -
“In light of the absence of a Defence on the file, it follows logically, that the matter would proceed to formal proof. What therefore is hearing by formal proof? In the case of Samson S. Maitai & Another v African Safari Club Ltd & Another [2010] eKLR, Emukule, J observed thus;
“……. Proof refers to evidence which satisfies the court as to the truth or falsity of a fact. Generally, as we well know, the burden of proof lies on the party who asserts the truth of the issue in dispute. If that party adduces sufficient evidence to raise a presumption that what is claimed is true, the burden passes to the other party who will fail unless sufficient evidence is adduced to rebut the presumption.”
In adducing this evidence, the party has to raise a presumption that whatever is claimed is true and this therefore goes to the merits of the case. The Court considering a full hearing, to determine the matter based on the evidence that is presented before it by the parties. In contrast, at a formal proof hearing, if the party with the onus of adducing evidence fails to satisfy the truth threshold, the matter would stand to be dismissed on the basis that it was unmeritorious and did not raise sufficient proof of any issues of fact or law. It would be heard and determined on its merits.”
17. The applicable law as to the burden of proof is set out under Sections 107, 108 and 109 of the Evidence Act. The Court of Appeal in Mumbi M''Nabea v David M.Wachira [2016] eKLR, while discussing the standard of proof in civil liability claims, stated as follows: -
“In our jurisdiction, the standard of proof in civil liability claims is that of the balance of probabilities. This means that the Court will assess the oral, documentary and real evidence advanced by each party and decide which case is more probable. To put it another way, on the evidence, which occurrence of the event was more likely to happen than not. Section 107(1) of the Evidence Act, Cap 80 Laws of Kenya provides as follows:
“Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist.”
The above provision provides for the legal burden of proof. However, Section 109 of the same Act provides for the evidentiary burden of proof and states as follows:
“The burden of proof as to any particular fact lies on the person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.”
The position was reaffirmed by the Court of Appeal in Maria Ciabaitaru M’mairanyi & Others v. Blue Shield Insurance Company Limited -Civil Appeal No. 101 of 2000 [2005] 1 EA 280 where it was held that:
“Whereas under section 107 of the Evidence Act, (which deals with the legal evidentiary burden of proof), the burden of proof lies upon the party who invokes the aid of the law and substantially asserts the affirmative of the issue, section 109 of the same Act recognizes that the burden of proof as to any particular fact may be cast on the person who wishes the Court to believe in its existence.”
18. On the standard of proof, the Court of Appeal in Palace Investments Limited v Geoffrey Kariuki Mwenda & another [2015] KECA 616 (KLR) that the standard of proof on a balance of probabilities is attained where the tribunal or a court finds it more probable than not that the fact exists, and that if the probabilities are equal, the burden is not discharged. Put differently, a narrow win suffices, but a draw is inadequate, and the party bearing the burden must fail. Quoting Denning J. in Miller –vs- Minister of Pensions [1947] 2 ALL ER 372, the Court stated that:
“That degree is well settled. It must carry a reasonable degree of probability, but not so high as is required in a criminal case. If the evidence is such that the tribunal can say: ‘We think it more probable than not’, the burden is discharged, but, if the probabilities are equal, it is not. Thus, proof on a balance or preponderance of probabilities means a win, however narrow. A draw is not enough. So, in any case in which the tribunal cannot decide one way or the other which evidence to accept, where both parties’ explanations are equally (un)convincing, the party bearing the burden of proof will lose, because the requisite standard will not have been attained.”
19. From the foregoing guiding authorities, it is evident that the duty of proving the averments in the plaint lay squarely with the Plaintiffs. The Court of Appeal in Karugi & Another v Kabiya & 3 Others (1987) KLR 347 underscored this point, holding that the burden on a plaintiff to prove a case remains constant throughout, even in formal proof proceedings. The Court stressed that before a trial court concludes that a plaintiff’s case is proved on a balance of probabilities by reason of the defendant’s failure to call evidence, the court must be satisfied that the plaintiff has tendered credible and believable evidence capable of standing on its own. In other words, the plaintiff must adduce evidence which, even in the absence of rebuttal, convinces the court that the claim has been established on a balance of probabilities. The Court (Hancox J) stated that: -
“Neither can I agree with Mr Waweru that the burden of proof is in any way lessened because the case is heard by way of formal proof. The burden on the plaintiff to prove his case remains the same, though it is true that, where the matter is not defended, or, as here, validly defended that burden may become easier to discharge.”
20. In the present case, the Plaintiffs’ sole witness, Ms. Agnes Mucuha who testified on behalf of all the Plaintiffs at the hearing conducted on 3rd April 2025 adopted her filed witness statement dated 23rd February 2024 and produced the Plaintiffs’ bundle of documents in evidence. in her testimony, Ms. Mucuha stated a Passenger Sales Agency Agreement (PSA) dated 17th September 2003, the 1st Defendant was appointed as an accredited agent of IATA member carriers for the sale of airline tickets in Kenya.
21. The witness highlighted that under the agreement, the 1st Defendant as a duly appointed agent, was under the agreement required to issue a Traffic Document immediately upon receipt of payment and to remit the proceeds to the carrier (Clause 7.1). That it was further a condition of the agreement that all services sold were to be sold on behalf of the carrier and in compliance with the carrier’s Traffic Document (Clause 3.2); and that all monies collected by the agent were the property of the carrier and had to be held in trust until satisfactorily accounted for.
22. Ms. Mucuha further told court that in breach of the PSA, the 1st Defendant failed to remit proceeds of ticket sales for the months of July and August 2018. A billing analysis exhibited in the Plaintiffs’ bundle (pages 29–254) showed the proceeds from ticket sales that were not remitted. She stated that by a letter dated 7th August 2018 (page 255 of the bundle), the 1st Plaintiff (IATA) formally notified the 1st Defendant of the default; and that by a subsequent letter dated 3rd October 2018 (page 258 of the bundle), IATA terminated the PSA on account of the default.
23. It was further the witness’ testimony that following the default, IATA lodged a claim with the 2nd Plaintiff, Saham Assurance, under the insurance policy, a claim Saham settled by paying IATA Kshs. 3,654,362.95 and USD 463,999.60 (page 259 of the bundle). By a Letter of Subrogation dated 22nd November 2018 (page 265 of the bundle), Saham acknowledged payment and confirmed its entitlement to pursue recovery against the Defendants.
24. Ms. Mucuha produced Deeds of Indemnity executed by the 2nd and 3rd Defendants (pages 14–22 of the bundle). Under these deeds, the Defendants undertook to indemnify Saham Assurance against all losses arising from default by the 1st Defendant, including failure to remit ticket proceeds. She testified that upon default and subsequent settlement by Saham, the indemnity obligations of the 2nd and 3rd Defendants crystallized.
25. Ms. Mucuha’s testimony was not challenged, as the Defendants failed to appear, file witness statements, or produce any documents. Her evidence therefore remained unshaken and stood as the sole account before the Court. In Acceler Global Logistics v Gladys Nasambu Waswa & another [2020] KEHC 9074 [KLR], the Court was clear that where a party fails to call evidence in support of his case, the adverse party’s evidence remains uncontroverted. The court stated as follows:
“The appellant opted not to adduce evidence at all. However, the appellant''s counsel cross-examined the Respondent and her witness. Thus, the only evidence on record is the evidence tendered by the Respondent and his witnesses. In Interchemie E. A. Limited v Nakuru Veterinary Centre Limited [2001] eKLR, it was held that where no witness is called on behalf of the defendant, the evidence tendered on behalf of the plaintiff stands uncontroverted.”
26. The above position is buttressed by the decision of Jamlik Muchangi Miano v Attorney General [2017] KEHC 8422 [KLR], where Mativo J (as he then was), as held as follows:-
“Where a party fails to call evidence in support of his case, that party’s pleadings remain mere statements of fact since in so doing the party fails to substantiate his pleadings. In the same vein the failure to adduce any evidence means that the evidence adduced by the Plaintiff against the defence is uncontroverted and therefore unchallenged.”
27. From the evidence adduced, I am satisfied that Ms. Mucuha’s testimony was consistent, corroborated by documentary evidence, and remained unchallenged. The evidence confirms that the 1st Defendant was accredited under a Passenger Sales Agency Agreement (PSA) dated 17th September 2003. Clause 7.2 of the PSA explicitly states:
“All monies collected by the 1st Defendant for transportation... are the property of the Carrier and must be held by the 1st Defendant in trust for the Carrier... until satisfactorily accounted for..."
28. The Plaintiffs'' witness testified that the 1st Defendant failed to remit the sales proceeds for July and August 2018, thereby breaching the express terms of the PSA (Clause 7.1) and the fiduciary duty created under Clause 7.2.
29. This court adopts the reasoning of Tuiyott J (as he then was) in the analogous case of International Air Transport Association & Anor VS Akarim Agencies Company Limited & 2 Others Milimani HCC. No. 15 of 2015, cited by the Plaintiffs’ Counsel where the Learned Judge held that:
"...IATA''s cause of action is also based on breach of the terms of the PSA... Stripped of any complexity, the Plaintiffs cause of action is that Akarim made ticket sales to third parties and did not remit the proceeds from the sales to airlines as required by the PSA. In that way it is was indebted to IATA."
30. In the premises, I am satisfied on the evidence before me that the 1st Defendant was in fundamental breach of the contract entered into with the Plaintiffs. Consequently, I find and hold them liable for the debt arising from the breach of contract.
31. Regarding the 2nd and 3rd Defendants, it is clear from the evidence tendered by Ms. Mucuha that they both executed Deeds of Indemnity dated 14th August 2017 in favour of the 2nd Plaintiff. The terms of the Deeds explicitly obligated the 2nd and 3rd Defendants to indemnify the 2nd Plaintiff against all losses and defaults arising from the 1st Defendant''s failure in the remission of sales of Traffic Documents. The Court agrees with the submissions by Counsel for the Plaintiffs that since the 1st Defendant defaulted, leading to the 2nd Plaintiff settling the claim, the 2nd and 3rd Defendants'' obligations crystallized. See the Akarim Agencies case (supra) where the Court Tuiyott J) held that:
“The Deeds of Indemnity were separate promises made by the 2nd and 3rd Defendants to fully indemnify Mercantile against, inter alia, claims and default arising howsoever from and out of default in remission of sales of the traffic documents and monies owed to airlines. The Court has found Akarim to be liable in that respect and so would the two Defendants by dint of the Deeds of Indemnity"
32. Consequently, I find and hold the 2nd and 3rd Defendants jointly and severally liable with the 1st Defendant under the terms of their Deeds of Indemnity.
33. Finally, it is also uncontroverted that the 2nd Plaintiff paid the defaulted sum to the 1st Plaintiff and acquired a Letter of Subrogation. The doctrine of subrogation under insurance law permits the insurer (2nd Plaintiff) to pursue the party ultimately responsible for the loss (the Defendants). The Court (Azangalala J - as he then was) in Abdulrazak Khalfan... vs. Pinnacle Tours & Travel Ltd & Ano (2005) eKLR, while dealing with similar claim stated as follows on the issue: -
“The 2nd Plaintiff was entitled to file suit against the Defendants under the doctrine of subrogation. The claim made by the Plaintiffs is one and as against the Defendants it is joint and several. The question of double enrichment does not therefore arise."
34. In the premises, the Court agrees that the 2nd Plaintiff has the right to recover the amounts paid, and the Defendants cannot claim that the debt was extinguished simply because the insurer performed its duty.
Whether the Plaintiffs are entitled to the prayers sought
35. Having found that the Plaintiffs proved their case on a balance of probabilities against all three Defendants, I find and hold that they are entitled to the prayers sought. Accordingly, I hereby order and decree as follows: -
i. That Judgment be and is hereby entered in favour of the 1st and 2nd Plaintiffs against the 1st, 2nd, and 3rd Defendants jointly and severally for the sum of:
a) Kshs. 3,654,362.95
b) USD. 463,999.60
ii. That the Defendants shall pay interest on the sums awarded in Order (1) at Court rates from the date of filing the suit until payment in full.
iii. That the Defendants shall pay the costs of the suit to the Plaintiffs on a full indemnity basis, as provided for in the Deeds of Indemnity, together with interest thereon until payment in full.
36. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
27TH NOVEMBER 2025
ADO MOSES
JUDGE
In the presence of: -
C/A – Moses
…..……...for the Plaintiffs
………… for the Defendants
'
1. By way of Plaint dated 25th September 2019, International Air Transport Association (IATA) and Saham Assurance Company Kenya Limited (formerly Mercantile Insurance) (together “the Plaintiffs”) sued George Town Travel & Tours Limited (“the 1st Defendant”), George Mwangi (the 2nd Defendant) and Damaris Njeri (the 3rd Defendant) for the recovery of Kshs. 3,654,362.95 and USD 463,999.60 together with interest at court rates until payment in full, full indemnity costs and further or other relief.
2. The Plaintiffs’ case is that the 1st Defendant, George Town Travel & Tours Limited, was appointed as an accredited agent under a Passenger Sales Agency Agreement (PSA) dated 17th September 2003, by which it was authorized to sell airline tickets on behalf of IATA member carriers and was obliged under Clause 7.2 of the PSA to remit all proceeds of such sales to the carriers. However, contrary to contrary to the agreement, the 1st Defendant defaulted in remitting proceeds sales for the months of July and August 2018.
3. It is further the Plaintiffs’ case that following the default by the 1st Defendant, the 2nd Plaintiff, Saham Assurance Company Kenya Limited, indemnified IATA and settled the claim under the insurance policy issued pursuant to IATA rules, thereby entitling them to pursue for recovery from the Defendants.
4. The Plaintiffs further contend that the 2nd and 3rd Defendants had executed Deeds of Indemnity 14th August 2017 in favour of Saham Assurance, by which they undertook to indemnify Saham against any losses arising from default by the 1st Defendant, thereby rendering them jointly and severally liable.
5. The Defendants opposed the claim vide a Statement of Defence filed on 22nd October 2010, denying indebtedness to the Plaintiffs in the Sum of USD 463,990/= and Kshs.3,654,362.93 as alleged.
Hearing
6. At the hearing the Plaintiffs called one witness, Ms. Agnes Mucuha, who adopted her witness statement dated 23rd February 2024 as her evidence in chief. The witness also produced in evidence the documents contained in her list of documents dated the same date, but filed in Court on 25th February 2024.
7. The Defendants did not attend the hearing, called no witnesses and produced no documents despite being served. The matter therefore proceeded for hearing based solely on the evidence and submissions of the Plaintiffs.
Plaintiff’s Written Submissions
8. At the conclusion of the hearing, the court gave directions on the filing of submissions and the Plaintiffs, through the law firm of Wamae & Allen LLP filed their submissions dated 15th April 2025. Again, no submissions were filed on behalf of the Defendants.
9. Counsel for the Plaintiffs submitted that the PSA is a standard contract executed between IATA Member Airlines and the 1st Defendant. It expressly establishes an agency relationship, governed by uniform global rules administered by IATA.
10. It was further the Counsel’s submissions that under Clauses 3.1–3.2, 7.1–7.3, and 14.1–14.2 of the PSA, the 1st Defendant was authorized to sell air transport on behalf of airlines; required to hold all monies collected in trust for the carriers; obligated to remit proceeds through the Billing and Settlement Plan (BSP); keep proper accounts; and obliged to return unused ticket stock upon termination.
11. Counsel claimed that the 1st Defendant breached these obligations by: collecting ticket sales over several months; failing to remit the amounts; continuing to issue tickets despite being placed under financial review; and failing to provide reconciliation statements.
12. Concerning Deeds of Indemnity, it was submitted that the 2nd and 3rd Defendants voluntarily executed the Deeds of Indemnity, guaranteeing the obligations of the 1st Defendant. Counsel cited among others Yeoman Credit Ltd v Latter [1961] 1 WLR 828 and Muthoni Kihara v Housing Finance Co. of Kenya, emphasizing that unlike guarantee, an indemnity creates unconditional, primary, continuing obligations, thereby making the 2nd and 3rd Defendants jointly and severally liable.
13. Regarding Subrogation, it was submitted on behalf of the Plaintiffs that the 2nd Plaintiff having compensated IATA under the financial security arrangement it became subrogated to IATA’s rights. Counsel relied on among others, the case of IATA v Pinnacle Tours & Travel Ltd (HCCC No. 15/2015) to support the argument that under insurance law, the principle is that the insurer, having paid the insured’s loss, is entitled to recover the amount from the party responsible.
14. Finally, the Plaintiffs, citing several authorities including the decision in the case of Trust Bank Ltd v Paramount Universal Bank Ltd & 2 Others (2009) eKLR, argued that since the Defendants produced no evidence, their defence amounts to mere denials which carry no weight. Counsel submitted that since the Plaintiffs’ evidence was uncontroverted, the Court should enter judgment as prayed.
Analysis & Determination
15. I have carefully considered the pleadings, the evidence tendered by the Plaintiffs at the hearing, and the submissions filed on behalf of the Plaintiffs. The issues that arise for determination are: -
i. Whether the Plaintiffs have established that the Defendants were in breach of the various contracts entered into with them.
ii. Whether the Plaintiffs are entitled to the prayers sought.
Whether the Plaintiffs proved breach
16. The Defendants neither appeared at the hearing nor produced any witness statements or documents. The Plaintiffs’ evidence therefore stands uncontroverted. This notwithstanding, the Plaintiffs are still bound to prove their case even where no evidence was tendered. The duty to prove was stated by J. B. Havelock in the case of Rosaline Mary Kahumbu v National Bank of Kenya Ltd [2014] eKLR, as follows: -
“In light of the absence of a Defence on the file, it follows logically, that the matter would proceed to formal proof. What therefore is hearing by formal proof? In the case of Samson S. Maitai & Another v African Safari Club Ltd & Another [2010] eKLR, Emukule, J observed thus;
“……. Proof refers to evidence which satisfies the court as to the truth or falsity of a fact. Generally, as we well know, the burden of proof lies on the party who asserts the truth of the issue in dispute. If that party adduces sufficient evidence to raise a presumption that what is claimed is true, the burden passes to the other party who will fail unless sufficient evidence is adduced to rebut the presumption.”
In adducing this evidence, the party has to raise a presumption that whatever is claimed is true and this therefore goes to the merits of the case. The Court considering a full hearing, to determine the matter based on the evidence that is presented before it by the parties. In contrast, at a formal proof hearing, if the party with the onus of adducing evidence fails to satisfy the truth threshold, the matter would stand to be dismissed on the basis that it was unmeritorious and did not raise sufficient proof of any issues of fact or law. It would be heard and determined on its merits.”
17. The applicable law as to the burden of proof is set out under Sections 107, 108 and 109 of the Evidence Act. The Court of Appeal in Mumbi M''Nabea v David M.Wachira [2016] eKLR, while discussing the standard of proof in civil liability claims, stated as follows: -
“In our jurisdiction, the standard of proof in civil liability claims is that of the balance of probabilities. This means that the Court will assess the oral, documentary and real evidence advanced by each party and decide which case is more probable. To put it another way, on the evidence, which occurrence of the event was more likely to happen than not. Section 107(1) of the Evidence Act, Cap 80 Laws of Kenya provides as follows:
“Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist.”
The above provision provides for the legal burden of proof. However, Section 109 of the same Act provides for the evidentiary burden of proof and states as follows:
“The burden of proof as to any particular fact lies on the person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.”
The position was reaffirmed by the Court of Appeal in Maria Ciabaitaru M’mairanyi & Others v. Blue Shield Insurance Company Limited -Civil Appeal No. 101 of 2000 [2005] 1 EA 280 where it was held that:
“Whereas under section 107 of the Evidence Act, (which deals with the legal evidentiary burden of proof), the burden of proof lies upon the party who invokes the aid of the law and substantially asserts the affirmative of the issue, section 109 of the same Act recognizes that the burden of proof as to any particular fact may be cast on the person who wishes the Court to believe in its existence.”
18. On the standard of proof, the Court of Appeal in Palace Investments Limited v Geoffrey Kariuki Mwenda & another [2015] KECA 616 (KLR) that the standard of proof on a balance of probabilities is attained where the tribunal or a court finds it more probable than not that the fact exists, and that if the probabilities are equal, the burden is not discharged. Put differently, a narrow win suffices, but a draw is inadequate, and the party bearing the burden must fail. Quoting Denning J. in Miller –vs- Minister of Pensions [1947] 2 ALL ER 372, the Court stated that:
“That degree is well settled. It must carry a reasonable degree of probability, but not so high as is required in a criminal case. If the evidence is such that the tribunal can say: ‘We think it more probable than not’, the burden is discharged, but, if the probabilities are equal, it is not. Thus, proof on a balance or preponderance of probabilities means a win, however narrow. A draw is not enough. So, in any case in which the tribunal cannot decide one way or the other which evidence to accept, where both parties’ explanations are equally (un)convincing, the party bearing the burden of proof will lose, because the requisite standard will not have been attained.”
19. From the foregoing guiding authorities, it is evident that the duty of proving the averments in the plaint lay squarely with the Plaintiffs. The Court of Appeal in Karugi & Another v Kabiya & 3 Others (1987) KLR 347 underscored this point, holding that the burden on a plaintiff to prove a case remains constant throughout, even in formal proof proceedings. The Court stressed that before a trial court concludes that a plaintiff’s case is proved on a balance of probabilities by reason of the defendant’s failure to call evidence, the court must be satisfied that the plaintiff has tendered credible and believable evidence capable of standing on its own. In other words, the plaintiff must adduce evidence which, even in the absence of rebuttal, convinces the court that the claim has been established on a balance of probabilities. The Court (Hancox J) stated that: -
“Neither can I agree with Mr Waweru that the burden of proof is in any way lessened because the case is heard by way of formal proof. The burden on the plaintiff to prove his case remains the same, though it is true that, where the matter is not defended, or, as here, validly defended that burden may become easier to discharge.”
20. In the present case, the Plaintiffs’ sole witness, Ms. Agnes Mucuha who testified on behalf of all the Plaintiffs at the hearing conducted on 3rd April 2025 adopted her filed witness statement dated 23rd February 2024 and produced the Plaintiffs’ bundle of documents in evidence. in her testimony, Ms. Mucuha stated a Passenger Sales Agency Agreement (PSA) dated 17th September 2003, the 1st Defendant was appointed as an accredited agent of IATA member carriers for the sale of airline tickets in Kenya.
21. The witness highlighted that under the agreement, the 1st Defendant as a duly appointed agent, was under the agreement required to issue a Traffic Document immediately upon receipt of payment and to remit the proceeds to the carrier (Clause 7.1). That it was further a condition of the agreement that all services sold were to be sold on behalf of the carrier and in compliance with the carrier’s Traffic Document (Clause 3.2); and that all monies collected by the agent were the property of the carrier and had to be held in trust until satisfactorily accounted for.
22. Ms. Mucuha further told court that in breach of the PSA, the 1st Defendant failed to remit proceeds of ticket sales for the months of July and August 2018. A billing analysis exhibited in the Plaintiffs’ bundle (pages 29–254) showed the proceeds from ticket sales that were not remitted. She stated that by a letter dated 7th August 2018 (page 255 of the bundle), the 1st Plaintiff (IATA) formally notified the 1st Defendant of the default; and that by a subsequent letter dated 3rd October 2018 (page 258 of the bundle), IATA terminated the PSA on account of the default.
23. It was further the witness’ testimony that following the default, IATA lodged a claim with the 2nd Plaintiff, Saham Assurance, under the insurance policy, a claim Saham settled by paying IATA Kshs. 3,654,362.95 and USD 463,999.60 (page 259 of the bundle). By a Letter of Subrogation dated 22nd November 2018 (page 265 of the bundle), Saham acknowledged payment and confirmed its entitlement to pursue recovery against the Defendants.
24. Ms. Mucuha produced Deeds of Indemnity executed by the 2nd and 3rd Defendants (pages 14–22 of the bundle). Under these deeds, the Defendants undertook to indemnify Saham Assurance against all losses arising from default by the 1st Defendant, including failure to remit ticket proceeds. She testified that upon default and subsequent settlement by Saham, the indemnity obligations of the 2nd and 3rd Defendants crystallized.
25. Ms. Mucuha’s testimony was not challenged, as the Defendants failed to appear, file witness statements, or produce any documents. Her evidence therefore remained unshaken and stood as the sole account before the Court. In Acceler Global Logistics v Gladys Nasambu Waswa & another [2020] KEHC 9074 [KLR], the Court was clear that where a party fails to call evidence in support of his case, the adverse party’s evidence remains uncontroverted. The court stated as follows:
“The appellant opted not to adduce evidence at all. However, the appellant''s counsel cross-examined the Respondent and her witness. Thus, the only evidence on record is the evidence tendered by the Respondent and his witnesses. In Interchemie E. A. Limited v Nakuru Veterinary Centre Limited [2001] eKLR, it was held that where no witness is called on behalf of the defendant, the evidence tendered on behalf of the plaintiff stands uncontroverted.”
26. The above position is buttressed by the decision of Jamlik Muchangi Miano v Attorney General [2017] KEHC 8422 [KLR], where Mativo J (as he then was), as held as follows:-
“Where a party fails to call evidence in support of his case, that party’s pleadings remain mere statements of fact since in so doing the party fails to substantiate his pleadings. In the same vein the failure to adduce any evidence means that the evidence adduced by the Plaintiff against the defence is uncontroverted and therefore unchallenged.”
27. From the evidence adduced, I am satisfied that Ms. Mucuha’s testimony was consistent, corroborated by documentary evidence, and remained unchallenged. The evidence confirms that the 1st Defendant was accredited under a Passenger Sales Agency Agreement (PSA) dated 17th September 2003. Clause 7.2 of the PSA explicitly states:
“All monies collected by the 1st Defendant for transportation... are the property of the Carrier and must be held by the 1st Defendant in trust for the Carrier... until satisfactorily accounted for..."
28. The Plaintiffs'' witness testified that the 1st Defendant failed to remit the sales proceeds for July and August 2018, thereby breaching the express terms of the PSA (Clause 7.1) and the fiduciary duty created under Clause 7.2.
29. This court adopts the reasoning of Tuiyott J (as he then was) in the analogous case of International Air Transport Association & Anor VS Akarim Agencies Company Limited & 2 Others Milimani HCC. No. 15 of 2015, cited by the Plaintiffs’ Counsel where the Learned Judge held that:
"...IATA''s cause of action is also based on breach of the terms of the PSA... Stripped of any complexity, the Plaintiffs cause of action is that Akarim made ticket sales to third parties and did not remit the proceeds from the sales to airlines as required by the PSA. In that way it is was indebted to IATA."
30. In the premises, I am satisfied on the evidence before me that the 1st Defendant was in fundamental breach of the contract entered into with the Plaintiffs. Consequently, I find and hold them liable for the debt arising from the breach of contract.
31. Regarding the 2nd and 3rd Defendants, it is clear from the evidence tendered by Ms. Mucuha that they both executed Deeds of Indemnity dated 14th August 2017 in favour of the 2nd Plaintiff. The terms of the Deeds explicitly obligated the 2nd and 3rd Defendants to indemnify the 2nd Plaintiff against all losses and defaults arising from the 1st Defendant''s failure in the remission of sales of Traffic Documents. The Court agrees with the submissions by Counsel for the Plaintiffs that since the 1st Defendant defaulted, leading to the 2nd Plaintiff settling the claim, the 2nd and 3rd Defendants'' obligations crystallized. See the Akarim Agencies case (supra) where the Court Tuiyott J) held that:
“The Deeds of Indemnity were separate promises made by the 2nd and 3rd Defendants to fully indemnify Mercantile against, inter alia, claims and default arising howsoever from and out of default in remission of sales of the traffic documents and monies owed to airlines. The Court has found Akarim to be liable in that respect and so would the two Defendants by dint of the Deeds of Indemnity"
32. Consequently, I find and hold the 2nd and 3rd Defendants jointly and severally liable with the 1st Defendant under the terms of their Deeds of Indemnity.
33. Finally, it is also uncontroverted that the 2nd Plaintiff paid the defaulted sum to the 1st Plaintiff and acquired a Letter of Subrogation. The doctrine of subrogation under insurance law permits the insurer (2nd Plaintiff) to pursue the party ultimately responsible for the loss (the Defendants). The Court (Azangalala J - as he then was) in Abdulrazak Khalfan... vs. Pinnacle Tours & Travel Ltd & Ano (2005) eKLR, while dealing with similar claim stated as follows on the issue: -
“The 2nd Plaintiff was entitled to file suit against the Defendants under the doctrine of subrogation. The claim made by the Plaintiffs is one and as against the Defendants it is joint and several. The question of double enrichment does not therefore arise."
34. In the premises, the Court agrees that the 2nd Plaintiff has the right to recover the amounts paid, and the Defendants cannot claim that the debt was extinguished simply because the insurer performed its duty.
Whether the Plaintiffs are entitled to the prayers sought
35. Having found that the Plaintiffs proved their case on a balance of probabilities against all three Defendants, I find and hold that they are entitled to the prayers sought. Accordingly, I hereby order and decree as follows: -
i. That Judgment be and is hereby entered in favour of the 1st and 2nd Plaintiffs against the 1st, 2nd, and 3rd Defendants jointly and severally for the sum of:
a) Kshs. 3,654,362.95
b) USD. 463,999.60
ii. That the Defendants shall pay interest on the sums awarded in Order (1) at Court rates from the date of filing the suit until payment in full.
iii. That the Defendants shall pay the costs of the suit to the Plaintiffs on a full indemnity basis, as provided for in the Deeds of Indemnity, together with interest thereon until payment in full.
36. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
27TH NOVEMBER 2025
ADO MOSES
JUDGE
In the presence of: -
C/A – Moses
…..……...for the Plaintiffs
………… for the Defendants
'