Heineken now seeks out of court settlement with local distributors


Dutch brewer Heineken is now seeking an out of court settlement with three distribution companies who filed a law suit against them for allegedly terminating a contract between them without any explanation.

The companies Maxam Limited, Modern Lane located in Uganda and Olepasu Limited in Tanzania accusse the brewer of acting in ‘bad faith’.

Through lawyer Philip Nyachoti representing Maxam Limited, they told commercial and admiralty division judge Justice Joseph Onguto that they will have a meeting with Heineken on 17th October 2017 in Amsterdam or London aimed at reaching an out of court agreement

Justice Onguto however directed that the court will continue hearing the matter on Friday 13th October.

The high court has since extended orders which had lapsed on 20th April stopping Heineken and the local distributors from terminating their contracts.

The orders stopped Heineken from terminating the distribution agreement entered between it and International BV in relation to the supply of the firm’s products in East Africa.

Justice Onguto said neither Maxam, Modern Lane, Olepasu nor the two other distributors were to blame for the delay in prosecuting the suit which filed way in 2016.

“The extended order shall be in place until 6th November 2017,” Justice Onguto ruled.

In the case, the proprietors of the three distributors accuse 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 which was to be from May 2013 to May 2016.

However, Heineken East Africa had told the court that the deals with the firms allowed Heineken to end the agreements without having to explain why, and that they would be considered if they applied for the new deals.
In their defense, the Brewer argued that it acted within terms of their agreement.

Heineken said that the termination is aimed at deleting the exclusivity clause in the current contracts to open up the distribution of its products across the region to more firms that are willing to partner with it.