Dutch brewing giant Heineken has returned to Kenya’s Court of Appeal in a fresh effort to avoid paying KSh230 million ($1.8 million) in interest linked to a KSh1.47 billion ($11.4 million) damages award granted to Kenyan tycoon Ngugi Kiuna’s distribution company, Maxam Ltd.

At the center of the latest dispute is whether interest can be added to a court award after the main case has already been decided. Heineken argues the interest claim was never part of the original proceedings and was introduced only after the courts had settled the underlying dispute.

The Court of Appeal has agreed that the issue raises a legitimate legal question and has temporarily halted enforcement of the disputed amount. However, the court ordered Heineken to provide a KSh250 million ($1.92 million) bank guarantee within 30 days. Failure to do so will automatically lift the stay and allow lower court proceedings on the payment to continue.

The latest court fight stems from a commercial relationship that unraveled nearly a decade ago. In May 2013, Heineken East Africa Import Company Ltd and Heineken International B.V appointed Maxam Ltd as their distributor in Kenya, while affiliated companies handled distribution in Uganda and Tanzania. The arrangement was part of the Dutch brewer’s push to strengthen its presence across East Africa.

Court upholds Maxam damages award

That relationship ended in January 2016 when Heineken terminated the distributorship agreements. Maxam responded by filing suit, arguing it had invested heavily in warehouses, delivery systems and logistics infrastructure based on expectations of a long-term partnership.

Through its lawyer, Philip Nyachoti, the company argued that the termination left it exposed after committing substantial resources to support Heineken’s growth in the region. Maxam maintained that the brewer’s decision caused significant financial losses and disrupted a business model built around the partnership.

What followed was a lengthy legal battle that moved through every level of Kenya’s court system. The High Court ruled in favor of Maxam, a decision later upheld by the Court of Appeal. Heineken subsequently took the matter to the Supreme Court, but the country’s highest court also backed the distributor’s claim, leaving the damages award intact.

With the compensation issue settled, attention shifted to the question of costs and interest. Maxam asked the High Court to allow interest on the damages award, arguing that the company should be compensated for the years that had passed since the dispute began.

Heineken appeal on interest award

Heineken opposed the request, saying interest had neither been pleaded during the original case nor awarded in the judgments delivered by the High Court and Court of Appeal. According to the brewer, the issue could not properly be introduced after the substantive litigation had already concluded.

The High Court disagreed and, in November last year, allowed Maxam’s application. That ruling increased Heineken’s potential liability to more than KSh1.7 billion ($13.12 million), prompting the brewer to launch the current appeal.

In granting a conditional stay, a three-judge panel of the Court of Appeal said the question of whether interest can be awarded after judgment, where it was neither sought nor granted earlier, deserved further examination. While the judges did not express a view on the outcome, they found that Heineken had presented an arguable appeal.

The brewer also argued that Maxam is no longer operating and may not be in a position to refund the money if the appeal succeeds. Kiuna rejected that claim, telling the court there was no evidence showing that repayment would be impossible if required.

Commercial case nears resolution

The dispute has drawn attention because of both its size and the individuals involved. Kiuna is a well-known figure in Kenya’s corporate sector. He previously served as chairman of BOC Kenya and remains one of the industrial gas company’s largest individual shareholders. Over the years, he has also held board positions at Proctor and Allan and TransCentury.

Maxam, which Kiuna founded in 2006, played a key role in building Heineken’s distribution network in East Africa. The company helped expand the brewer’s reach beyond Kenya into neighboring Uganda and Tanzania as demand for premium beer brands grew across the region.

For Heineken, the case represents one of the most significant legal disputes tied to its East African distribution operations. The Dutch brewer, which operates in more than 170 countries, had argued during the original proceedings that the contract termination was part of a broader restructuring of its distribution model.

Kenyan courts, however, consistently found that Maxam had suffered losses arising from the termination and awarded compensation accordingly. The latest appeal will now determine whether the additional KSh230 million in interest remains part of the final bill, potentially bringing one of Kenya’s longest-running commercial disputes a step closer to its conclusion.