Court Dismisses US$ 7.4M Madison Insurance Case

Court Dismisses US$ 7.4M Madison Insurance Case

By Dickson Jere

Madison General Insurance Limited took out a lawsuit against Chakaka Village Country House Limited – which was developing a luxurious resort and hotel in Kafue – for the claim of USD 7.4 million. The claim also included Chakaka promoters and directors Lawrence Sikutwa and Ethel Sikutwa.

However, when the matter came up, Chakaka raised a preliminary point of law.
It argued that there was no “Letter of Demand” that was served on the company and therefore the case is a nullity. Only the two Sikutwas were served the letters.

Madison argued that Chakaka no longer exists and the offices in Kafue have since been closed and therefore could not serve the letters on the company.
Further, Madison argued that since the two Sikutwas were the directors in Chakaka, they ought to have informed the company after they received their letters of demand.

The High Court Judge heard the case and determined that indeed only the two Sikutwas were served the “Letters of Demand” but the company was left out. She, therefore, opined that serving the letter on directors in their personal capacity did not constitute service on the company.

“Furthermore, the 1st Defendant as a limited company, is a separate legal entity capable of suing and being sued in its own capacity,” the Judge observed.

“Therefore, it should have been served with the demand letter in its own right and not as one with the 2nd and 3rd Defendants,” the Judge ruled.

She noted that the law requires that all the defendants in a case must be served individual letters of demand and therefore Madison should have opted for substituted service if found that Chakaka closed shop.

“In conclusion, the matter is accordingly dismissed with costs to the Defendants,” the Court ruled, based on this legal technicality.

Case citation – Madison General Insurance (Z) Limited v Chakaka Village Country House Limited & Others – 2025/HL/38 and Ruling delivered in Livingstone two weeks ago, 13th February, 2026.

Lecture notes;

1. Since 2020, the High Court Rules changed and requires that one must first serve a letter of demand on would-be defendants before filing the case. However, the service of letter of demand is not covered by any rules as it is a pre-litigation stage. There is need to have clarity as this matter as order of substituted service can only be obtained when one files a case in Court.

2. Some Judges have accepted email service and WhatsApp as part of service of demand letter as there are no rules on service of demand that are not that certain. Others have accepted service by advertisement even without Court order to serve as such. There is need for clarity on this aspect of service especially when one is elusive.