Dutch brewer Heineken has secured a $1.9 million (Sh250 million) bank guarantee from Equity Bank, allowing it to suspend payment of disputed interest on a compensation award to Kenyan businessman Ngugi Kiuna’s Maxam Ltd while it challenges the charge on appeal.
The Court of Appeal granted the conditional stay on May 29 and ordered the brewer to lodge the guarantee in Maxam’s favor within 30 days, pending the hearing and determination of its appeal. The security keeps the disputed sum out of Kiuna’s reach for now without wiping out the underlying judgment.
At issue is roughly $1.8 million (Sh230 million) in interest that the High Court added to Maxam’s payout last November. Heineken says the interest was never pleaded, argued or granted during the original proceedings and surfaced only after judgment. Kiuna’s side says the money is properly owed.
The award itself has already run the full length of Kenya’s court system. A three-judge appellate bench found that Heineken had raised an arguable point on whether interest can be tacked onto damages after a case has closed, and it agreed the question was serious enough to justify a stay while the appeal is heard.
Equity Bank set narrow terms on the guarantee. The lender said the instrument would lapse the moment either it paid out any amount demanded under it or the Court of Appeal ruled in Heineken’s favor, at which point the bank would carry no further liability.
The clash traces back to a distributorship deal that took effect on May 1, 2013, under which Heineken East Africa Import Company appointed Maxam its exclusive distributor in Kenya. The arrangement was meant to run three years with room for renewal. On Jan. 27, 2016, Heineken International, acting for its local unit, issued a notice seeking to end it that May.
Maxam went to court. The company argued that it had sunk heavy investment into warehousing, delivery and logistics on the understanding that the relationship would continue, and that the abrupt exit rendered those commitments worthless. Through lawyer Philip Nyachoti, the distributor accused the brewer of terminating on flimsy, selfish and malicious grounds to clear the way for new distributors on better terms.
The High Court sided with Kiuna. In a 2019 ruling, Justice James Makau found Heineken in breach, holding that it had constructively terminated the contract by appointing other distributors without a valid notice. The judge said the promise of automatic extensions had kept Maxam performing and investing in the business.
Heineken appealed and lost. The Court of Appeal upheld the award in 2024, and later that year the Supreme Court threw out the brewer’s bid to suspend the judgment, with a five-judge bench led by Chief Justice Martha Koome ruling that the matter turned on the validity of the termination notice rather than any constitutional question.
The row over interest reopened the file. Last November, the High Court dismissed Heineken’s challenge to how the decree was calculated and allowed Maxam to fold interest into the compensation, lifting the total the brewer faces from about $11.3 million (Sh1.47 billion) to more than $13 million (Sh1.7 billion).
Heineken has pushed back hard on that increase. The brewer told the court that Maxam is no longer trading and would have no way to refund the money if the appeal succeeds, leaving it exposed if it pays first and wins later. It also warned that enforcing the decree before the appeal is heard could inflict lasting financial and reputational damage, up to and including insolvency proceedings.
Kiuna rejected that reasoning, telling the court that Heineken had produced no credible evidence to show Maxam could not repay the sum if ordered to.
The businessman is a familiar name in Kenyan boardrooms. He founded Maxam in 2006 after a long run in consumer goods, including 16 years as chief executive of industrial hygiene firm Johnson Diversey, and previously chaired BOC Kenya, where he remains among the larger shareholders.
Maxam’s original suit also carried its regional affiliates, Uganda’s Modern Lane Ltd and Tanzania’s Olepasu Ltd, though those sister claims were later discontinued.
Heineken East Africa Import Company is part of the Heineken group, the Dutch multinational that brews in more than 170 countries and ranks among the world’s largest beer makers by volume. Its East African footprint spans Kenya, Uganda and Tanzania through a mix of owned breweries and import arrangements.
The bank guarantee buys the brewer time rather than a way out. Should the appeal fail, the full payout, interest included, falls due, and Equity would be on the hook for the secured amount. A win would erase the interest and release the bank. Until the appellate judges rule, the money sits frozen behind Equity’s pledge.
