Court directs out-of-court settlement in case against Kenya-Re

The High Court in Nairobi has asked Kenya Reinsurance Corporation (Kenya-Re) and its former Managing Director Jadiah Mwaraniah to consider an out-of-court settlement of a case in which the latter sued the company’s board for terminating his contract.

The option was offered by Employment and Labour Relations Court judge Byrum Ongayo.

In the case, Mr. Mwarania wants the court to restrain Kenya-Re from enforcing its letter dated March 12, 2018 that sought to terminate his contract which he argues is still in force up to April 21, 2021.

He claims the contract was renewed in 2016 for a period of 5 years and the insurance company has purported to terminate the contract in total violation of his constitutional rights.

The former director says he joined the company in the year 1990 in the position of Managing Trainee and was subsequently promoted through various ranks before he rose to the managing director position in 2012; a position he held until he was sent packing.

He argues that prior to the termination, he had been served with various unwarranted letters touching on alleged shortcomings that he responded to and was therefore surprised to be fired.

“In June 2017, I received a directive from Joseph Kinyua — Chief of Staff and Head of Public Service — regarding appointments to the Board and in compliance with the aforesaid directive appointments, I did undertake all that was required,” reads part of the affidavit.

According to the former MD, he believes that his compliance with the directive of chief of staff and Head of Public Service was the genesis of the perceived issues with some members of the Kenya-Re board, especially those who were due for retirement, during an AGM dated June 16, 2017.

Mr. Mwarania further says that he was invited to a disciplinary hearing on March 9 in which he sought for more time to respond to the issues.

He further claims that he reported to work at 8am the following day only to be informed that the board had convened a meeting without his knowledge and was later called and handed a termination letter without any notice , hearing or justification.

In its response filed in court, Kenya-Re claims that prior to the termination, various concerns had been raised on the managing director’s shortcomings and the same was not adequately addressed by Mr. Mwarania.

“The said concerns were not only based on internal observations but also on independent reports by external sources,” says Kenya-Re board chairman David Kimei.

Mr. Kimei further says that Mr. Mwarania did not address the weaknesses leading to the downgrading of the corporation’s rating from a B plus to B.

He says that the downgrading meant that the corporation had moved from a re-insurer that has a good ability to meet its ongoing insurance obligations to one that is vulnerable.