Heineken set to appeal judgement to pay Maxam ltd 1.7 billion


Heineken International B.V has filled a memorandum of appeal against a high court judgement that ordered it to pay Kenyan company, Maxam limited Sh1. 7 billion for unlawful termination of their distributorship agreement.

The Dutch company argues that the judge erred in law and in fact by awarding excessive and unwarranted damages.

Through lawyer Phillip Nyachoti, Maxam sued Heineken through its affiliates Heineken East Africa import company limited and Heineken international B.V.

The appellants further argues that the learned judge also erred in law and in fact by failing to consider the express terms of the distributorship agreement.

“The learned judge erred in law and in fact by holding that the respondent had a legitimate expectation that the distributorship agreement would not been terminated,” states Heineken in the memorandum.

According to them the judge erred by failing to apply the provisions of the evidence act and ignoring the evidence they tendered in court.

Heineken wants the court of appeal to set aside the high court judgement and decree dated 29th July 2019.

High court restrained Heineken or it’s agents from terminating it’s distribution agreement dated 21st May 2013 between Maxam and Heineken East Africa relating to the distribution of Heineken Larger beer brand in Kenya contrary to the terms of the agreement.

The Dutch farm was also restrained from appointing any other distributor of the said beer in Kenya.

READ:Nairobi court orders Dutch Heineken to pay Kenyan firm sh 1.7 b for damages

The judge declared the notice of termination dated 27th January 2016 from Heineken East Africa to Maxam is unlawful, irregular, unprocedural and the null and void ab initio.

“The circumstances of the breech special damages arose have been successfully demonstrated before this court and I find that there is no dispute that the plaintiff has now completely been driven out of business and lost their entire Heineken beer distribution. For that reason special damages would be the only award that would compel itself to this court” ruled the judge.

Nyachoti submitted that his client and the Dutch firm executed an agreement on 21st May 2013 for the distribution of the said beer which came into force effective date being 1st May 2013, to remain in force and effective until the end of the 3rd anniversary of the effective date.

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The lawyer added that the agreement was to be automatically extended for a period of one year and subsequent 1 year period unless terminated by either party by giving the other written notice of termination within three months of the 3rd anniversary of the effective date or one year extension.

The court heard that Heineken EA is now personally selling and distributing the beer directly to the market and at lower prices than those allowed to Maxam which is in itself a scheme to circumvent the court orders in place in favour of the plaintiff and to stifle the plaintiff’s business.

“Special damages or loss of business of sh1, 799,978,868 is awarded to the plaintiff” high court ruled.