Two beer distribution firms have failed to convince the High Court to block Kenya Breweries Limited (KBL) from terminating its existing distributorship deals.
Justice Rhoda Rutto dismissed the application by Tonny West Ltd and Outlook Index Ltd, seeking orders to block the beer maker from interfering with its rights to distribute KBL’s products in at least 17 routes in Nairobi and Kajiado counties.
The two distributors submitted that they would suffer irreparable loss that could not be adequately compensated by way of costs if the order was not granted.
KBL on its part argued that among the routes the two beer distributors were fighting to retain were preserved for its Bia Tosha Ltd, which has been engaged in a fierce court battle with the manufacturer over 22 routes.
Justice Rutto said the consequences of any orders issued as sought have an implication on the orders issued by the Supreme Court in February 2023, reinstating the Bia Tosha routes.
“Granting the interim orders would result in the possible issuance of parallel and conflicting orders further complicating an already intricate situation and creating a legal conundrum, noting that the Plaintiffs (distributors) intend to proceed for arbitration once the sought orders are granted leaving the likely affected parties without recourse,” the judge noted.
The judge added that while there was indeed a case between the parties, it was not shown to the court that the two beer distributors stand to suffer irreparable damage unless the conservatory orders were granted.
The beer distributors sought court orders stopping KBL from suspending or interfering with its rights to distribute the beer products in Kawangware, Kitengela, Athi River, Ngong Road, Bissil, Satellite, Kenyatta Market, Hurlingham, Upper Hill, Dagoretti Ndonyo, Kajiado and Namanga areas.
The court was informed that the parties signed distributorship agreements on October 17, 2016, and May 15, 2019.
The firms also distributed the beer in the Industrial Area, South B, Nairobi West, Lang’ata, and Rongai areas.
The distributors said KBL sent them a letter in February 2023, intending to interfere with the deal, following the Supreme Court decision.
They told the court that they would be completely locked out of their distributorship business in their respective territories despite faithfully performing their obligations.
KBL admitted entering but noted that as a result of the apex court’s decision, it notified all its business partners in the affected areas of the judgment with a view of establishing the implications of the judgment and how it would impact its business.
The beer maker said it notified the affected parties that the exclusive distributorship rights over 22 routes to Bia Tosha had been reinstated and Bia Tosha would be entitled to distribute the beer on an exclusive basis.
KBL added that the company too received a letter from Bia Tosha demanding reinstatement of “Bia Tosha territory” and that they were obligated to comply with the orders of the Supreme Court.
The communication led to the filing of the case, KBL added.
Last December, two other distributors – Ngong Matonyok Wholesalers Ltd and Manara Ltd – failed in yet another bid to block KBL from terminating their distributorship contracts.
