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Tropic Air Limited, which operates a fleet of Cessna aircraft and helicopters, has issued a 21-day notice to Old Mutual to pay the amount as claims for compensating the third parties that were affected by the accident or risk liquidation. FILE PHOTO | NMG
Old Mutual General Insurance Kenya Limited is facing a liquidation suit over a $3 million (Sh481.5 million) claim from a privately-owned air charter company whose helicopter had an accident in 2022.
Tropic Air Limited, which operates a fleet of Cessna aircraft and helicopters, has issued a 21-day notice to Old Mutual to pay the amount as claims for compensating the third parties that were affected by the accident or risk liquidation.
“Take notice that failure to pay the afore-stated amount shall result in Tropic Air Limited filing for a liquidation order against your company,” said the Nanyuki-based firm in a January 10 notice to Old Mutual.
The firm’s helicopter on August 4, 2022 crashed into Lake Logipi in the Turkana area. There were no fatalities but the passenger and the crew were evacuated to Nairobi for treatment while the helicopter was written off.
Tropic Air’s row with Old Mutual General, which is the market leader in general insurance with a market share of 9.33 percent as at the end of June 2023 has sucked in the Insurance Regulatory Authority (IRA) and the Kenya Civil Aviation Authority (KCAA).
IRA letter to KCAA on July 18, 2023 shows Old Mutual declined to pay the aviation claim on the basis that Tropic Air conducted flights below 500 feet above ground level (AGL), which it said was contrary to section 10(2) (e) of the Kenya Civil Aviation (Rules of the air) Regulations 2018 and the air charter company’s own operating manual.
“The contention was that Tropic Air did not have permission and was not legally entitled to conduct its flights under 500 feet AGL,” said IRA senior manager for consumer protection Monicah Thirima in a letter to KCAA.
IRA further noted that KCAA had approved Tropic Air’s operating manual that allowed it to fly at a minimum of 100 feet AGL and sought the aviation regulator’s clarity on whether the firm had indeed breached any regulation.
Documents seen by this publication shows KCAA then responded to IRA commissioner general Godfrey Kiptum on September 29, 2023 saying that flights by Tropic Air were in non-congested areas and did not require special authorisation. KCAA concluded that Tropic Air was compliant in operating her helicopters in areas other than congested areas.
“In view of the above and the determination by KCAA that Tropic Air was within the rules in the afore-said flight, you are directed to settle the claim within 30 days from the date of this letter and keep us posted,” Mr Kiptum directed Old Mutual in a November 3, 2023 letter.
Tropic Air is accusing Old Mutual of failing to honor the IRA directive and has written a letter to the insurer, threatening to issue it with an insolvency notice.
The firm, in a letter to Old Mutual, claims the insurer is engaged in “a desperate asset fire sale in Kenya with intent to avoid honoring claims which have crystallised.”