Court Halts Enforcement of Sh1.7 Billion Heineken Award Pending Appeal

Heineken has secured temporary relief in its long-running dispute with businessman Ngugi Kiuna after the Court of Appeal suspended enforcement of a compensation award exceeding Sh1.7 billion pending determination of an appeal.

The brewer moved to the appellate court to challenge the inclusion of an additional Sh230 million in interest on a Sh1.47 billion compensation award granted to Kiuna’s Maxam Ltd. Heineken argues that the interest amount was introduced after judgment and should not be included in the final payout.

A three-judge bench found that the company had raised an arguable appeal and granted a conditional stay of execution. However, the court directed Heineken to provide a Sh250 million bank guarantee in favour of Maxam within 30 days, warning that the stay would automatically lapse if the guarantee is not furnished.

The dispute traces its roots to Heineken’s termination of distributorship agreements with Maxam and related firms in Uganda and Tanzania in January 2016. The agreements had been signed in May 2013.

Maxam maintained that it had invested heavily in warehousing, logistics and delivery infrastructure before the contracts were terminated, accusing Heineken of ending the arrangements on what it termed “flimsy, selfish, and malicious grounds.”

While courts, including the Supreme Court, upheld compensation in favour of Maxam, the parties later returned to the High Court to contest issues relating to costs and interest.

Heineken maintains that the disputed interest was neither pleaded nor awarded in earlier court decisions and argues that enforcing the payment before the appeal is heard could expose the company to financial and reputational harm.

Kiuna opposed the application, arguing that Heineken had not provided credible evidence showing he would be unable to refund the money should the appeal ultimately succeed. The appeal will now determine whether the contested Sh230 million interest component should remain part of the compensation award.