Tycoon spared Sh120m bill in row with brewer
Tycoon Ngugi Kiuna.
The High Court has spared beer distributorship tycoon Ngugi Kiuna a Sh120 million legal bill claimed by Dutch multinational Heineken following a vicious court battle over exclusive delivery of imported beverages.
High Court judge Alfred Mabeya has ruled that the Sh120 million claimed by Heineken’s sister company Brouwerijen BV in legal bills was calculated based on an erroneous formula.
The judge held that the bill was calculated on the false assumption that the subject matter of the case – a series of beer distribution contracts – was Sh5.37 billion.
Mr Kiuna’s Maxam Ltd, Modern Lane Ltd, and Olepasu Tanzania Ltd sued three companies Heineken uses to brew beer and import the product into East Africa after their exclusive distribution contracts were terminated in 2016. Collectively, the three firms were claiming Sh5.37 billion. But each firm filed its separate claim before the court.
The Dutch companies sued were Heineken East Africa Import Company, Heineken Brouwerijen BV, and Heineken International BV.
But Modern Lane and Olepasu withdrew their suits against Heineken. Maxam only withdrew its claim against Heineken Brouwerijen.
This meant that Maxam’s battle with Heineken International and Heineken East Africa Import Company was still active.
Following the partial case withdrawal, Heineken Brouwerijen sought payment of Sh120 million in legal fees from Mr Kiuna’s companies.
The High Court Deputy Registrar, who is tasked with resolving disputes over legal fees, agreed with Heineken that the contracts at the heart of the dispute were worth Sh5.37 billion.
Using that amount as the value of the subject matter, the Deputy Registrar agreed that Heineken was due for Sh120 million in compensation for legal fees from Mr Kiuna’s firms.
Justice Mabeya has now ruled that the legal bill was to be calculated based on each individual firm’s claim against Heineken.
Suffer the costs
Modern Lane had claimed Sh22.7 million in damages, while Olepasu claimed Sh3.5 billion.
“Modern Lane Ltd and Olepasu Ltd cannot be made to suffer the costs of Maxam Ltd who decided to pursue its claim to the bitter end,” Justice Mabeya ruled.
“In view of the foregoing, I find that the taxing officer erred in holding that costs of the withdrawn claims were ordered as against all the plaintiffs instead of Modern Lane Ltd and Olepasu Ltd. She further erred in taxing the bill on the entire claim of Sh5,377,979,755 instead of on the withdrawn claims as ordered by the court,” the judge added.
The bitter row started in 2016 after Heineken general manager Uche Unigwe proposed to slash the earnings by Mr Kiuna’s firms from Sh854 per beer case to Sh220.
Mr Kiuna’s firms claimed to have helped Heineken grow its East African turnover from Sh1.3 billion to Sh1.8 billion in 2015, but were being repaid with brutal punishment.
Maxam won its case against Heineken in 2019 when another High Court judge, James Makau, ordered that the beer maker compensate Mr Kiuna’s firm with Sh1.7 billion for illegal contract termination.
Heineken has since appealed against the decision.
