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Economy

Heineken distributor to get Sh1.7bn in row

Maxam
High Court Judge James Aaron Makau also awarded Maxam Sh1.7 billion for loss of business. FILE PHOTO | NMG 

Maxam Ltd, the distributor of Heineken beer lager in Kenya, will continue to distribute the product after the High Court reinstated the distribution agreement that the manufacturer cancelled.

High Court Judge James Aaron Makau also awarded Maxam Sh1.7 billion for loss of business after the contract was unfairly terminated by Heineken East Africa Import Company Ltd and Heineken International B.V.

“I find and hold the valuation of the lost business in the sum of Sh1,799,978,868 remains uncontroverted by the defendants and as such, an admission on their part,” said Justice Makau.

The Dutch brewer has been supplying its Heineken beer in the Kenyan market through local distributor Maxam Ltd, which is associated with businessman Ngugi Kiuna who has held the franchise since 2007.

Lawyer Philip Nyachoti had told the court that Maxam had been distributing the product long before a formal distribution agreement was signed on May 21, 2013.

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The judge said the formal deal required Maxam to invest in infrastructure.

“I find the promise and arrangement of automatic extensions served as motivation for Maxam to keep performing in accordance with the assigned obligations resulting to investing heavily in the business,” justice Makau.

He also said the firms illegally and unfairly purported to unilaterally terminate the agreement.

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