Court deals blow to Bia Tosha bid on EABL sale

A beer distributor will have to wait longer to pursue its decade-old battle against East African Breweries Limited (EABL) after the High Court declined to fast-track the hearing of two cases involving terminated distribution rights and a proposed multi-billion-shilling corporate transaction.

Justice Gregory Mutai declined an application by Bia Tosha Distributors  Limited seeking an expedited hearing of its petition challenging the termination of its exclusive distribution rights and its bid to stop the proposed Sh300 billion sale of Diageo PLC’s 65 percent stake in EABL to Asahi Group Holdings.

The judge ruled that the court must first determine the exact petition properly before it before issuing any directions on how the matter will proceed.

“Determining the petition to be heard is paramount before the Court can give further directions on whether the main petition and pending applications should be heard separately, sequentially, or together in one composite process,” Justice Mutai said.

The complication arose after Bia Tosha filed a Further Amended Petition in January 2026, significantly expanding its case to include new claims and a fresh Sh45 billion damages demand, alongside its attempt to block the Diageo–Asahi transaction.

Justice Mutai's directions in the matter come days after the court dismissed Bia Tosha’s application to issue conservatory orders blocking the proposed Diageo–Asahi deal transaction.

After failing to secure interim orders, the distributor urged the court to proceed directly to hearing the long-running dispute, arguing that it has been pending since 2016 and that the Supreme Court had previously directed that it be resolved expeditiously.

However, the respondents, including Kenya Breweries Limited, UDV (Kenya) Limited, EABL, and Diageo, supported an expedited timeline but insisted that the court must first clarify the status and scope of the amended pleadings.

They argued that the January 2026 amendments by Bia Tosha fundamentally altered the case by introducing expansive new monetary claims running into tens of billions of shillings, as well as reliefs they said resemble ordinary commercial litigation rather than a constitutional petition.

Bia Tosha maintained that the matter should proceed to a hearing without further delay, arguing that any objections to the amended pleadings could be addressed in the final judgment.

The court, however, found that it could not proceed without clarity on the exact case before it, stressing that proper identification of the pleadings was essential before any substantive hearing.

The roots of the Bia Tosha case stretch back to June 2016, when the small Nairobi-based beer and spirits distributor fell out with Kenya Breweries Limited after its exclusive distribution rights across 22 routes in Nairobi and surrounding areas were terminated.

The distributor claims it had paid Sh38,298,000 in goodwill to secure those rights and accuses EABL and its affiliates of breaching the agreement by abruptly ending the arrangement, effectively dismantling its core business operations.

Since then, the matter has moved through all levels of Kenya’s judiciary.

 In February 2023, the Supreme Court reinstated conservatory orders originally issued by the High Court in 2016, restoring interim protections over Bia Tosha’s distribution territory.

The litigation has since grown into one of the country’s most prolonged commercial disputes, marked by multiple applications, contempt claims, and constitutional arguments.

The January 2026 amended petition escalated the matter further by seeking to block Diageo’s planned sale of its majority stake in EABL to Asahi Group Holdings, a transaction valued at US$2.3 billion (about Sh300 billion).

Bia Tosha argues that the Diageo–Asahi deal should not be allowed to proceed while its long-running dispute with EABL and its associated companies remains unresolved.

The distributor contends that Diageo, which it has described as a financially stressed foreign corporation, would, upon completing the sale, have no meaningful Kenyan asset against which any eventual judgment in Bia Tosha's favour could be enforced.

The distributor further argues that allowing the transaction to close would render any eventual award largely unenforceable, threatening to extinguish the fruits of a decade-long legal battle before the substantive dispute has even been heard on its merits.
However, the respondents countered that EABL’s local subsidiaries remain operational in Kenya with substantial assets, and that Diageo is a UK-listed company subject to established cross-border enforcement mechanisms.

“If a judgment is entered against it, the Applicant would have recourse to reciprocal enforcement mechanisms, such as the Foreign Judgments (Reciprocal Enforcement) Act, Cap 43,” the court noted earlier while dealing with the multi-billion shares sale deal.

The court also cautioned that halting or interfering with a major cross-border transaction at an interlocutory stage could negatively affect investor confidence and market stability.

The court directed that parties will argue the admissibility of the Further Amended Petition by Bia Tosha on May 28, 2026.