Kenya: Court reinstates orders stopping Heineken from terminating contracts with local distributors

A dispute pitting Dutch brewer, Heineken and three Kenyan distributors took another turn on August 31 after the High court reinstated orders stopping the firm from terminating their contracts, The Star reported.

Justice Joseph Onguto, in the ruling, said it will be in the interest of justice to reinstate the orders which lapsed on April 20 2017.

The orders stops Heineken from terminating the distribution agreement entered between it and Maxam Limited in relation to the supply of the firm’s products in the country.

Heineken had asked the court to reject the plea by Maxam to restore the orders, further accusing the distributors of engaging in delaying tactics to frustrate the hearing of the case.

However, Justice Onguto said neither Maxam, Modern Lane (Uganda) and Olepasu limited (Tanzania) the two other distributors, were to blame for the delay in prosecuting the suit filed way back in 2016.

"I have no doubt that the court may reinstate interim orders vacated on its own motion if circumstances so indicate. The order as extended shall subsist until 6 November 2017 when the matter will be heard in inter parties."

Justice Onguto further ordered Heineken through its lawyer Gitau Singh to file and serve their amended joint statements of defence within seven days.

Thereafter, Maxam through lawyer Philip Nyachoti will have 7 days to serve its response.

In the case, the proprietors of the three distributors accuses Heineken International BV and its subsidiaries Heineken East Africa Import Company and Heineken Brouwerjen BV of acting in bad faith.

The firms says they were not given reasons why the parent company was terminating its relationship with them.

Heineken's deal with the distributors was from May 2013 to May 2016, after which the contract was to be renewed on a yearly basis.

According to Nyachoti the notice was issued on January 27 2016.

It is an argument that terminating the contracts was unreasonable considering the huge investment they distributors `have made to ensure compliance of the agreement entered in 2013 between parties.

The three companies says they boosted Heineken's turnover to Sh1.8 billion in 2015 up from Sh1.3 billion.

05 September, 2017