Companies
High Court upholds KBL, UDV distributorship deal
Thursday May 11 2023
Kenya Breweries Limited’s beer canning line at the Ruaraka plant in Nairobi. FILE PHOTO | NMG
The High Court has declined to suspend orders blocking Kenya Breweries Ltd and UDV (Kenya) Ltd from terminating exclusive beer distributorship agreements with the two firms.
Justice Alfred Mabeya declined to suspend the orders obtained by Ngong Matonyok Wholesalers Ltd and Manara Ltd in March this year, barring the beer makers from terminating their distributorship agreements.
Bia Tosha Ltd wanted the order lifted arguing that the two distributors failed to disclose to the court a directive of the Supreme Court, restoring its distributorship deal with KBL.
The judge said the order was made to maintain the status quo after being satisfied that the documents placed before it, called for the preservation of the distributorship deal, pending the determination of the case.
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“Since I have found that there was no material non-disclosure, the application to discharge the orders on that basis fails,” the judge said and directed Bia Tosha to respond to the main case, filed by the rival distributors.
The two firms rushed to court in March claiming that KBL and UDV were on the verge of terminating or suspending their distribution agreements, which they entered in April 2019 and January 2022, respectively.
The distributors claimed that the termination would have the ‘domino effect’ of triggering breaches of countless contracts between them and third parties.
Mr Joseph William Nduva Muli said he had been a distributor of the beer makers for 55 years while Manara Ltd had been a distributor for seven years and that they have signed multi-billion investments and entered into contracts with third parties, to enable them to carry out the job.
He said his firm has exclusive rights to distribute the products in Kiserian, Ngong, Wangige, Magadi and Dagoretti regions.
Manara Ltd, on its part, has been a distributor of the products in Kitengela, Kajiado, Athi River, Machakos, Bissil, Namanga and Maili Tisa.
Justice Mabeya said the court was satisfied with the urgency of the application and the financial implication that would arise from the termination and the prevailing hard economic times.
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Bia Tosha joined the case and in an affidavit, the managing director Ms Anne Marie Burugu said the two firms did not mention the Supreme Court judgment. She said the two distributors were guilty of concealment of material facts.
In February, the Supreme Court ruled in favour of Bia Tosha, a former distributor who sued the brewer for terminating the distributorship agreement in 2016.
