Blow to EABL in row with beer distributor
An alcohol distributor, Bia Tosha Distributors Ltd, has regained control of 22 beer distribution routes in Nairobi, dealing a blow to giant brewer Kenya Breweries Limited, which has opposed the monopoly in liquor distribution.
The Supreme Court yesterday reversed the decision of the Court of Appeal to lift High Court temporary orders that had preserved the distribution routes exclusively to Bia Tosha pending the determination of a petition involving a partnership dispute.
The apex court also set aside the decision of the appellate court to refer the dispute to arbitration per the respective parties’ distributorship agreements.
The implication of the Court of Appeal ruling dated July 10, 2020, was that Kenya Breweries Limited had been allowed to repossess some routes from Bia Tosha and reallocate them to other distributors, who could not access the market areas.
But yesterday the Supreme Court, while ruling on an appeal filed by Bia Tosha, reinstated the temporary orders issued by the High Court preserving Bia Tosha’s distribution territory exclusively to it.
The High Court orders had been issued on June 29, 2016, by Justice Joseph Onguto, pending the hearing and determination of the petition filed by Bia Tosha challenging repossession of the routes and refund of Sh27.3 million it had paid the Kenya Breweries as goodwill in 2005.
The apex court also remitted the case to the High Court for disposal of the petition dated June 20, 2016, on a priority basis considering the age of the matter.
Supreme Court
In addition, the Supreme Court directed the High Court to consider the consequences of any disobedience of the orders issued by Justice Onguto. It found there was contempt on the part of EABL and UDV (Kenya) Limited for interfering with some routes.
“Having overturned the Court of Appeal judgment and having established that there was contempt of court, the same should not go unpunished. We direct the High Court to, on the basis of our finding on contempt, issue suitable punishment for contempt of court on priority basis as it deals with the petition pending before it on its merits,” said the Supreme Court.
“Having found that there was contempt of court, the High Court should also proceed to assess the suitable punishment arising out of the contempt application dated August 23, 2016, by Boa Tosha pending before it”.
The 22 routes that Bia Tosha claimed exclusive control and which had been repossessed and given to other companies are Namanga, Bissil, Kajiado, Kitengela, Athi River, Industrial Area, South B and Nairobi West.
Others are Kenyatta, Lang’ata, Rongai, Kiserian, Magadi, Upper Hill, Ngong Road, Hurlingham, Kawangware, Satellite, Dagoretti, UDV A, UDV B and UDV C.
Error
The five-judge bench led by Deputy Chief Justice Philomena Mwilu in its judgment said the Court of Appeal, by overturning the ruling by the High Court, fell into error.
“This was by failing to appreciate and uphold that the dispute before the court related to a breach of constitutional rights. In issuing the relief countermanding that was made by the High Court and by referring the matter to the arbitrator, and making a full and final determination on matters still pending before the High Court, the Court of Appeal fell into further error,” said the bench. The other judges on the bench were justices Smokin Wanjala, Njoki Ndung’u, Isaac Lenaola and William Ouko.
The partnership between Bia Tosha and EABL started in 1997 when the former was appointed as a distributor for the latter’s products within Gachie, Mwimuto, Kanunga, Kiambaa, Banana, Karura, Gathanga, Ndenderu, Ndumberi, Tinganga, Riabai, Kanguya, Wangige, and Ridgeways.
Subsequently, in the year 2000, through a letter dated July 20, 2000, Bia Tosha was offered new distribution areas namely Baba Dogo, Kariobangi North, Dandora I, and Dandora II on the condition that it would pay a non-refundable goodwill of Sh6,630,000 to the Kenya Breweries. BY DAILY NATION
Post a Comment