The corridors of the High Court witnessed a high-stakes legal showdown on Friday as East African Breweries PLC (EABL) and Kenya Breweries Limited (KBL) fiercely pushed back against an attempt to freeze a landmark Sh300 billion ($2.3 billion) corporate share transaction.
For the respondents, the proceedings were less about a genuine legal grievance and more about fending off what their legal representatives described as “blatant commercial sabotage” by a local distributor, Bia Tosha (BT).
The distributor has sought an injunction to halt the multi-billion-shilling transfer of EABL shares, anchoring their application on a decade-old dispute over beer distribution routes and an alleged Sh38 million in goodwill.
It is a move that has left the respondents both deeply frustrated and deeply concerned about the broader implications for the country’s investment climate.
Addressing the court, the respondents’ legal team did not mince words, characterizing the application as a severe abuse of the judicial process.
They pointed out the sheer absurdity of using an unadmitted, localized distribution dispute to hold an international transaction of immense national economic importance hostage.
“There is absolutely zero legal or factual nexus between local beer delivery routes in Nairobi and the international transfer of EABL shares,” the respondents’ legal counsel argued before the judge.
“What we are witnessing is an attempt to use the courts for extortionate leverage, risking massive Foreign Direct Investment that would immensely benefit the national exchequer.”
The respondents expressed a profound sense of exasperation over the petitioner’s legal maneuvers. Having already had a similar application dismissed by Justice Momuye on April 9 for lacking merit, the distributor moved to the Court of Appeal, only to rush back to the High Court 26 days later seeking the exact same interim orders.
The respondents termed this “a classic case of forum shopping.” Speaking to the broader impact of the protracted litigation, representatives for EABL and KBL shared their concerns over the chilling message this sends to the global market.
“It is deeply concerning that a transaction of this magnitude can be repeatedly threatened without the petitioner even offering an undertaking as to damages,” a representative noted, highlighting the immense value destruction that could befall thousands of institutional and retail shareholders including employee provident funds if the deal were to collapse.
“We are well-capitalized, blue-chip entities. Should the petitioner ever succeed in their underlying Sh38 million claim, we are more than capable of settling it. But blowing up a Sh300 billion transaction to secure it is wildly disproportionate and unjust.”
Despite the delays, there was a palpable sense of resolve from the respondents’ side as the session concluded. They remain steadfast in their commitment to protecting shareholder value and ensuring that corporate transactions are not derailed by frivolous litigation.
The presiding judge has reserved the highly anticipated ruling for May 28, a date that the respondents, the Nairobi Securities Exchange, and international investors will be watching with bated breath.
