Dutch Beer maker- Heineken has asked the Court of Appeal to overturn a decision requiring it to compensate local distributor Maxam Ltd Sh1.7 billion over an alleged breach of contract.
The manufacturer told the court of appeal bench led by Justice Daniel Musinga that there was no breach of contract to warrant payment of any damages.
It faulted the award issued by High Court Judge James Makau three years ago saying he did not state where, how, and when the breach occurred.
It was their case that Judge Makau made a mistake by holding that Maxam had a legitimate expectation that its contract wouldn’t be terminated.
“The judge proceeded to rule on the law of legitimate expectation which does not apply to private entities. That’s why we say the Judge was biased. He ignored all our submissions,” said Heineken.
But Maxam through lawyer Philip Nyachoti pleaded with the court not to set aside the judgment saying justice Makau did not make a mistake in awarding the damages.
“We submit that the judge delivered a complete and solid judgment,” said Naychoti.
He dismissed claims that the Judge relied on the doctrine of legitimate expectations to arrive at his decision, saying he instead considered the submissions.
The Court of Appeal after hearing arguments from both parties said it will render its decision on February 9 next year.
In 2019, Justice Makau delivered a judgment and awarded Maxam Sh1.7 billion as special damages for loss of business after its distribution agreement was terminated.
The judge ruled that the termination of the contract dated May 21, 2013, by Heineken East Africa Company Limited and Heineken International B.V was unlawful, irregular, unprocedural, and therefore null and void.
“A declaration is issued that the Kenyan distribution agreement between the plaintiff and the defendants is in full force and effect as per the terms and conditions set therein,” the judge ruled.
On legitimate expectation, the judge said:
“I find the promise and arrangement of automatic extensions served as motivation for the plaintiff to keep performing in accordance with the assigned obligations resulting in investing heavily in the business.”
Maxam Ltd said they entered the deal in 2013 for exclusive distribution deals in Kenya, Uganda, and Tanzania.
But the Dutch brewer terminated the deal.
