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Construction company drops N$10m insurance suit

2023-02-07  Maria Sheya

Construction company drops N$10m insurance suit

Chinese construction company China Railway Seventh Group has agreed to drop a suit in which it was demanding N$10 million in damages as it constructs the dual carriageway to the Hosea International Airport. 

The company dragged the Hollard Insurance Company of Namibia, Quanta Insurance Limited and Momentum Insurance Limited to court, claiming the entities refused to pay out an insurance claim pertaining to damages incurred during the ongoing construction of phase one of the dual carriageway to the airport. However, before the matter could be determined by the High Court, China Railway and the three insurance companies reached an out-of-court settlement on Friday.

According to the agreement that has since been made a court order, the complaints laid out by China Railway are not claims as envisaged in the insurance contract.

The parties also agreed that “if the plaintiff (China Railway) institutes a claim as envisaged in the insurance contract, the defendants shall consider such claims in terms of the insurance contract afresh”. 

Furthermore, should the claims be rejected, China Railway may approach the court within 12 months. In its suit, China Railway claims that as per their agreement, the insurance companies would be co-insurers for the N$10 million, with Hollard covering 30%, Quanta providing 40% and the remaining 30% will be covered by Momentum.  The company claims that in 2020, it received four complaints about alleged damage to private property in proximity to the project.

This includes three homes on Daan Bekker street, Olympia, as well as a flat unit in the Mountainview complex on the same street. 

The complaints were of alleged damage to the private properties that were allegedly caused by vibrations and/or noise from the work carried out by the company on the project in proximity to the properties.

Despite the company not admitting to having caused damage to the properties, it submitted the claims. 

It also employed Sasol to carry out an assessment. The assessment concluded that the vibration and noise did not exceed the maximum limit. China Railway claims that although the owners of the properties have not yet instituted claims for the damages, “the possibility of future quantified claims for alleged damages against the plaintiff cannot be excluded”. In the correspondence, the insurance companies noted that the claims do not fall part of what is insured. 

“We regret to advise that we cannot entertain these claims inter alia, as the event is not covered in terms of the contractors’ insurance policy wording,” said the insurance companies.

They further stated China Railway has failed to disclose the Sasol report and material information on risk pertaining to the nature of their work.

Judge Herman Oosthuizen presided over the matter. 

Lawyers Heinrich van Vuuren, Raymond Heathcote and Reinhard Tötemeyer represented the parties.


2023-02-07  Maria Sheya

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