Date: February 29, 2013 E.C.
Applicant: Ethiopian Insurance Corporation
Respondents:
- Qalkidan Tesfaye
- Lakomenza Consumers Cooperative Association
Legal Rule:
- Insurance Coverage Limit for Property Damage: Under Proclamation No. 799/2005, the maximum liability of an insurer for property damage resulting from a vehicle accident is limited to 100,000 Birr per accident, regardless of the number of claimants or properties damaged. This limit applies to the total property damage caused by a single accident, not per individual claimant.
- Interpretation of Legal Texts: When interpreting legal texts, the focus should be on the plain language of the law and its intended purpose. Different sections of the same law should be read harmoniously to give effect to the overall legislative intent.
Summary of Facts:
The 1st Respondent’s shop was damaged by a vehicle owned by the 2nd Respondent and insured by the Applicant (Ethiopian Insurance Corporation). The Applicant had already paid 100,000 Birr to another claimant for property damage arising from the same accident. The lower courts ordered the Applicant to pay an additional amount to the 1st Respondent, arguing that the 100,000 Birr limit applied per claimant, not per accident.
Decision of the Cassation Division:
The Cassation Division reversed the lower courts’ decision. The Court held that the 100,000 Birr limit in Proclamation No. 799/2005 applies to the total property damage caused by a single accident. Since the Applicant had already paid the full limit to another claimant, they were not liable for further payments for property damage arising from that same accident. The court explicitly stated that the 100,000 Birr is the ceiling for any property damage claim arising from a single incident, regardless of how many individuals are affected. The court ordered the 2nd respondent to pay the remaining damages to the 1st respondent.
Cited Laws:
- Proclamation No. 799/2005, Article 16(1)(c) (Third Party Motor Insurance Proclamation)
- Commercial Code, Articles 685 et seq.