Kenya: Heineken loses appeal against Sh1.7 billion payout

The High Court has declined to stop execution of a judgement requiring Heineken East Africa Company to pay Maxam Limited Sh1.7 billion in a distribution row, The Star reported on August 14.

Heineken had moved to court seeking stay of execution orders pending their appeal.

Lawyers representing Heineken on Tuesday argued the company has no assets.

"We have filed a notice of appeal and we shall be prosecuting it expeditiously. We ask the court to come at the earliest day to have the matter heard. During that period, we pray that a stay be granted and we are ready to provide security," they said.

However, lawyer Philip Nyachoti representing local distributor Maxam said Heineken has deliberately declined to obey the orders issued by Justice James Makau last month.

“This is impunity by the company. They deliberately decided not to obey the orders issued on July 29. Defendants should comply with the orders before the stay is issued,” Nyachoti argued.

Justice Wilfrida Okwani, however, declined to grant the beer makers any orders and directed that they serve their application to the respondents.

The matter will be heard on September 17.

Last month, Justice Makau awarded Maxam Sh1,799,978,868 as special damages for loss of business after its distribution agreement was terminated.

The judge ruled that termination of the contract dated May 21, 2013 by Heineken East Africa and Heineken International B.V was unlawful, irregular, unprocedural and therefore null.

“A declaration is issued that the Kenyan distribution agreement between the plaintiff and the defendants is in full force as per the terms and conditions set therein,” the judge ruled.

Maxam sued the two international beer companies for terminating their agreement without reason.

Through lawyer Nyachoti, Maxam contended the agreement indicated that in case of termination before end of term, they would discuss and agree to a fair and reasonable monetary amount for compensation.

The firm contended that it stood to lose over Sh1.7 billion of business if the agreement was allowed to end without compensation.

The firm accused the international beer companies of blatantly acquiring its key customers as sub-distributors contrary to an order stopping the same.

The two international companies in response argued that the decision to cancel the distributorship was because they intended to attract more suppliers to expand their business.

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