Heineken sued for terminating contracts of three companies

The Court of Appeal has allowed two firms who took up a distribution deal with Dutch brewer Heineken to join a contract case filed against it.

Henieken Uganda and Heineken Tanzania took up distribution of the brewer’s products after the relationship with Kenya’s Maxam Ltd, Uganda’s Modern Lane Ltd and Tanzania’s Olepasu Ltd became sour.

The court found that the new distributors had an interest in the case as its orders would also affect them.

The firms had been locked out of the Sh5.3 billion row before the High Court, but judges Asike Makhandia, William Ouko and Patrick Kiage agreed they should also tell their side of the story.

Maxam, Modern Lane and Olepasu opposed the application to have the two firms joining the case, arguing that their presence would complicate the case further.

But the Court of Appeal agreed with a single judge of the same court, Justice Mohamed Warsame, who had ruled that since there were orders that had blocked the Dutch brewer from cancelling the contract, the orders were also touching on the two.

“On the whole, we agree with the assessment of the single judge in allowing the application. We further find that there would be no prejudice occasioned to the first to the third respondents ( Maxam, Modern Lane and Olepasu) if the applicants are allowed to participate in the intended appeal,” ruled the judges.

Maxam, Modern Lane and Olepasu sued Heineken alongside its affiliates Heineken East Africa Import Company and Heineken Brouwerjen BV.

The three argued the brewer had no authority to cancel their licences and that such action would affect their business and that of other companies with whom they had trade agreements.

In defence, Heineken East Africa General Manager Ache Unigwe said the deals with the firms allowed Heineken to end the agreements without having to explain why, and that they would be considered if they applied for the new deals.