Dutch brewer Heineken has been ordered to provide a bank guarantee of Sh1.47 billion to businessman Ngugi Kiuna’s Maxam Limited before it can proceed to file a new challenge to a payout to its former distributor in the local market.
Heineken International B.V. and its subsidiary Heineken East Africa Import Company had offered to provide a smaller bank guarantee of Sh100 million to the court in the long-running dispute that emerged from the termination of Maxam’s distribution deal.
The High Court in Nairobi said Heineken International should provide a bank guarantee of Sh1.47 billion in favour of Maxam, allowing the claimant to collect its dues if an appeal by the brewer challenging the award does not succeed.
In a November 7, 2025 decision, Maxam was awarded Sh1.799 billion plus interest at 14 percent for breach of its expectation of a long-term exclusive distribution deal for Heineken products. The court also awarded Maxam legal costs of Sh86 million.
The multinational and its subsidiary went to court on November 24, 2025 seeking to stop the execution of the orders pending an appeal it plans to file.
The court allowed the application to suspend implementation of the orders on condition that Heineken provides the bank guarantee.
“In the event that the appeal is successful, these funds shall be made available to the appellant,” the court said in the ruling issued on March 2, 2026.
“I note however, if this court allows a bank guarantee for a sum less than the decretal amount, in the event that the appeal is dismissed, then the plaintiff/respondent shall be forced to start execution proceedings to recover the balance of the decretal amount less the amount in the bank guarantee. In my view, this kind of scenario would greatly prejudice the respondent.”
The court added that failure to provide the bank guarantee within 21 days will amount to a default and Maxam will be free to enforce its decree.
Distribution row
Heineken East Africa Import Company appointed Maxam as its exclusive distributor of Heineken products in Kenya under a distribution agreement that took effect on May 1, 2013.
The agreement was to run for three years with provisions for termination and renewal. On January 27, 2016, Heineken International B.V., acting on behalf of its local subsidiary, issued a notice seeking to terminate the agreement effective May 1, 2016.
Maxam subsequently went to court seeking to protect its distribution deal, arguing that it had made substantial investments in the business on a legitimate expectation of a continuing relationship with Heineken.
The company added that it stood to suffer financial and reputational loss due to the abrupt termination. Maxam initially obtained interim orders stopping the brewer from terminating the agreement or appointing other distributors.
The temporary orders were, however, lifted in 2017, paving the way for Heineken to appoint other distributors.
Maxam and the brewer have continued their legal fight, with the matter at one point reaching the Supreme Court. Heineken and its subsidiary have previously denied wrongdoing, arguing that the termination was lawful under the contract and that Maxam bore the commercial risk of its investment.
