Heineken is locked in a contract row with three distributors. FILE PHOTO | NMG
Summary
- Maxam Ltd, Uganda’s Modern Lane Ltd and Tanzania’s Olepasu Ltd are seeking to stop termination of their contract to distribute Heineken larger beer in Kenya, Uganda, and Tanzania.
- The distributors had sought to extend interim orders issued by the High Court in April last year and which according to the law, were deemed to have lapsed in April this year.
Beer maker Heineken East Africa Import
Co Ltd has been stopped from terminating a contract entered into with
companies it had hired to distribute its products.
High
Court judge Joseph Onguto has ruled that the order will remain in force
until November, when all the parties in the matter will be heard.
The
judge said the interest of justice was “tilted in favour of not
allowing Heineken to terminate the contract,” as the issue is the
subject of a case currently pending before court.
Maxam
Ltd, Uganda’s Modern Lane Ltd and Tanzania’s Olepasu Ltd are seeking to
stop termination of their contract to distribute Heineken larger beer
in Kenya, Uganda, and Tanzania.
The distributors had
sought to extend interim orders issued by the High Court in April last
year and which according to the law, were deemed to have lapsed in
April this year.
In
the case filed at the High Court last year, the distributors argued the
manufacturer had given them a notice in January, 2016 of the intention
to terminate the contract signed in 2013 without following the
procedure.
“The companies have made massive investment
in distributing Heineken beer brand in Kenya, Uganda and Tanzania. It is
illegal for the manufacturers to terminate the contract without valid
reasons,” lawyer Philip Nyachoti for the distributors said.
The
three firms, he said, injected a turnover of Sh1.8 billion in 2015 in
their distribution of the brand in Kenya, Uganda and Tanzania; and that
their expansion plan for more distribution will go to waste if the
contract is terminated.
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