A Lagos High Court has ordered Standard Alliance Insurance Plc and 17 other Nigerian insurance companies, along with a foreign third-party reinsurer, to indemnify IRS Airlines Limited for the total loss of its Fokker 100 aircraft, registration 5N-SIK, which occurred in an accident in Niger Republic on May 10, 2014.
In the judgment delivered by Justice K. Jose, the court ruled that the insurers wrongfully refused to honour the airline’s insurance claim arising from the incident.
The judge declared several aspects of the insurers’ defence invalid, particularly their reliance on undisclosed reinsurance terms that were not part of the original insurance policy agreement with IRS Airlines.
The court also criticized the insurers for breaching provisions of the Insurance Act 2004, highlighting their improper reliance on foreign loss adjustment arrangements that were not transparently disclosed to the insured party.
Managing Director of IRS Airlines Limited, Yemi Dada, reacted to the judgment by stating that the decision affirmed the airline’s rights and validated its compliance with all policy obligations.
According to him, the court awarded damages in the insured sums amounting to millions of dollars or their naira equivalent, alongside interest accruing from 2014.
Dada emphasized that the judgment vindicates the airline’s position that it fulfilled all contractual obligations, including full premium payments, prompt notification of the incident, and full material disclosures at the time the policy was taken.
He added that the ruling provides long-awaited relief after years of financial strain caused by the unresolved claim, which contributed to significant debt owed to the Asset Management Corporation of Nigeria.
“This judgment provides much-needed relief after years of financial strain, including significant debt to AMCON arising from the unpaid insurance proceeds. It reaffirms the rule of law in insurance contracts and protects policyholders from unfair denials based on hidden foreign arrangements,” Dada said.
