Legal Blow for Beer Distributors as Court Rejects Protection Bid

The Court of Appeal has declined to grant interim orders protecting two Nairobi-based beer distributors from possible termination of their contracts, leaving their agreements open to change while an appeal proceeds.

Ngong Matonyok Wholesalers Limited and Manara Limited had asked the court to restrain Kenya Breweries Limited and its related companies from altering or ending their distribution arrangements. They argued that without temporary protection, they faced significant financial harm and disruption to their businesses.

The dispute centres on the allocation of beer distribution territories in parts of southern Nairobi and Kajiado County. Ngong Matonyok and Manara have distributed Kenya Breweries products since 2019 in areas including Ngong, Kitengela, Kajiado, Athi River and Namanga. 

These areas, however, overlap with routes claimed by Bia Tosha Distributors Limited, whose exclusivity has been protected by conservatory court orders since 2016. In 2023, the two wholesalers moved to the High Court, alleging that Kenya Breweries intended to terminate their contracts in favour of Bia Tosha. They said this would cause irreparable loss, interfere with third-party contracts and risk insolvency. 

In December 2024, the High Court dismissed their application, finding that the disputed agreements had been entered into over territories already reserved for Bia Tosha and that any losses could be compensated through damages. Ngong Matonyok and Manara appealed the decision, arguing that the High Court had wrongly relied on assumed findings of contempt against Kenya Breweries. 

They pointed to earlier directions from the Supreme Court, which reinstated conservatory orders protecting Bia Tosha’s routes but dismissed several contempt applications in May 2023 and directed the High Court to hear the constitutional petition on its merits.

In its ruling, the Court of Appeal accepted that the appeal raised arguable issues. However, the judges held that interim relief was not necessary, noting that the alleged harm was financial and could be quantified. The court stated that refusing temporary orders would not render the appeal ineffective.

The judges also emphasised that the substantive issues, including questions of exclusivity and alleged contempt, remain before the High Court in line with the Supreme Court’s directions. Bia Tosha opposed the application, arguing that granting injunctions would undermine existing Supreme Court orders and interfere with pending contempt proceedings against Kenya Breweries. 

The Court of Appeal agreed and dismissed the application, ordering Ngong Matonyok and Manara to pay Bia Tosha’s legal costs. While the appeal will continue, the ruling leaves the two wholesalers without interim protection and maintains the existing conservatory arrangements in favour of Bia Tosha.