A judge has ordered the Insurance Regulatory Authority (IRA) to pay Nairobi-based lawyer Waweru Gatonye Sh263 million for legal services offered eight years ago in a dispute involving the collapsed Lakestar Insurance company.
Justice David Majanja ordered IRA to pay Waweru Gatonye and Company Advocates a sum of Sh262,990,246 after he dismissed the authority’s bid to challenge the fee.
He declined IRA’s arguments that the fee is “manifestly” high and punitive, saying it is without basis in law, and is “unjust enrichment of the advocate”.
Mr Gatonye’s law firm demanded the fee after representing the authority at the High Court in a case filed by the owner of the collapsed insurance company, John Kipkemboi Kilel, in 2013 seeking compensation of Sh12 billion.
In the case that is pending determination, Mr Kilel claimed that the winding up of Lakestar Insurance was falsely engineered in 2002.
Mr Kilel accused former IRA chief executive Sammy Makove of engineering false information to liquidate the insurance firm.
The regulator placed Lakestar under statutory management in 2002 before the managers recommended the firm be wound up a year later.
He sought an award of Sh2 billion for business opportunities lost, Sh3.7 billion for loss of property, capital gains, and cash loss as well as Sh6.2 billion for reputation damage.
He also sought Sh39.6 million for loss of monthly earnings and Sh6.2 million for loss of earnings from the investment.
After filing the case, IRA hired Waweru Gatonye and Company Advocates to defend it in court.
Upon being instructed, the advocates proceeded to prepare and file a Memorandum of Appearance, statement of defence, defendant’s (IRA) list of witnesses, and list of documents.
But before the case had been certified as ready for hearing, a dispute arose between the authority and the advocates over the legal fees, where the parties could not agree, and subsequently, the advocates applied to cease from acting for the authority, an application that was allowed in February 2019.
In urging Justice Majanja to uphold the fee of Sh262 million awarded by the court’s deputy registrar, Mr Gatonye’s firm said before ceasing to act for IRA his firm had filed a comprehensive defence together with the list of witnesses and documents.
Judge Majanja heard that Mr Gatonye’s firm ceased to act for IRA owing to lack of instructions from the authority especially in providing witnesses and failure to agree on fees.