Heineken loses bid to stop Sh1.7bn award to tycoon Ngugi Kiuna
Maxam Ltd Managing Director Ngugi Kiuna at a past event.
The Supreme Court has struck out an application filed by Dutch beer maker Heineken, seeking to suspend a judgment granting businessman Ngugi Kiuna more than Sh1.7 billion for terminating a distributorship agreement.
A five-judge bench presided by Chief Justice Martha Koome struck out the applications by Heineken saying the judgement of the Court of Appeal in May was not based on the interpretation or the application of the constitution.
The Dutch beer maker wanted the court to suspend the decision pending determination of its appeal fearing that the Kenyan tycoon was likely to recall a bank guarantee from Equity Bank.
The judges said it was clear that whereas there was mention of constitutional provisions by the High Court and the Court of Appeal, the material question before the two courts was on the validity of the termination notice issued to Mr Kiuna’s firm Maxam Limited.
“In arriving at its final orders, the two courts examined the distribution agreement, in the grant of the orders sought. Its final determination was therefore not pegged on and indeed had nothing to do with the interpretation or application of the Constitution,” said Justices Koome, Deputy CJ Philomena Mwilu, Mohammed Ibrahim, Smokin Wanjala and Njoki Ndung’u.
The judges added that the manufacturer’s cases do not meet the requisite jurisdictional threshold, for it to be heard by the Supreme Court. Heineken East Africa Import Company Ltd revealed in court papers that it got a bank guarantee from Equity Bank while the case was pending at the Court of Appeal and Maxam Limited was likely to call for the release of the money any time.
In May, the appellate court upheld the multi-million shilling award to Maxam Ltd after Heineken terminated its distributorship contract in 2016.
Heineken faulted the Court of Appeal judges saying they failed to consider that the distribution agreement expressly excluded compensation for any losses.
Further, the beer maker said the appeal it intended to file was arguable as the apex court was being called to examine whether the Court of Appeal erred by holding that there was clear presumption that unilateral termination is not available in the distributorship agreement.
The manufacturer further wanted the court to determine whether the distributorship agreement could only be terminated by “mutual separation”.
Mr Kevin Santry, a director of Heineken East Africa Import Company Limited, said in an affidavit that the bank guarantee for Sh1.79 billion was at risk of being called in any time and once it is paid out, the company was not sure of recovering the amount.
“Once the payment is effected, the sum will not be within reach of this Honourable court,” the Dutch beer maker said through senior counsel Fred Ngatia.
