BY SAM ALFAN.
Heineken has suffered the second blow after Court of Appeal upheld a decision directing the Dutch beer maker to pay a former distributor Maxam limited Sh1.7 billion for breach of contract seven years ago.
Appellate judges Pauline Nyamweya, Ali Aroni and John Mativo upheld decision stating that High Court judge James Makau did not err in awarding Maxam ltd the millions.
We affirm and uphold the award by the High Court to Maxam Ltd of special damages for loss of business of Kshs. 1,799,978,868.00 to be paid by Heineken E.A and Heineken B.V, arising from their repudiatory breach of the Kenya Distribution Agreement,” ruled the appellate judges in their decision.
The judges further affirmed and upheld the order by the High Court directing Maxam Ltd submit the Distributorship Agreement dated 21 March 2013 to the Stamp Duty Collector for assessment of the duty payable, upon which Maxam Ltd was to pay the amount in the normal manner within 7 days from the date of the judgment.
In their decision, judges further affirmed and upheld the declaration issued by the High Court that the Notice of Termination dated 27th January 2016 from Heineken E.A to Maxam Ltd was unlawful, irregular, unprocedural and therefore null and void.
Court further said Heineken E.A and Heineken B.V shall pay Maxam Ltd the costs of the trial in the High Court and of the consolidated appeals.
Heineken asserted that the court wrongfully concluded that it constructively terminated the distribution contract by appointing additional distributors even after the court had slapped sanctions on August 28, 2017.
The beer manufacturer had claim the distributor was not entitled to any explanation since the contracts were unequivocal that each of the contracted distributors could be compensated with €450,000 (Sh51 million then) once the business relationship was severed.
This is after Heineken International, filed an appeal against the decision made by Commercial Court Judge Aaron Makau on July 29, last year, awarding the local firm special damages to the tune of Sh1,799,868.
The brewer, which had been jointly sued with Heineken East Africa Import Company Ltd, has cried foul over what it terms as “excessive and unwarranted damages” claiming Maxam neither pleaded nor proved special damages for alleged loss of business.
“The Judge erred in law and in fact by holding that Maxam Ltd had a legitimate expectation that the distribution agreement would not be terminated,” the international firm said in court papers and argued that the court totally ignored the evidence tendered to justify the change in contract terms.
Heineken asserted that the court wrongfully concluded that it constructively terminated the distribution contract by appointing additional distributors even after the court had slapped sanctions on August 28, 2017.
“This is despite the fact that the injunctive order barring appointment of additional distributors was not reinstated,” the firm has explained.
