https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1021

Heineken East Africa Import Company Ltd v Maxam Ltd & another (Civil Appeal (Application) E995 of 2025) [2026] KECA 1021 (KLR) (29 May 2026) (Ruling) Neutral citation: [2026] KECA 1021 (KLR) Republic of Kenya In the Court of Appeal at Nairobi Civil Appeal (Application) E995 of 2025 JM Ngugi, MN Nduma & M Sila, JJA May 29, 2026 Between Heineken East Africa Import Company Limited Applicant and Maxam Limited 1st Respondent Heineken International BV 2nd Respondent (Being an application for stay of execution pending the hearing and determination of an appeal against the decision contained in the Ruling of the High Court at Nairobi (Mong’are, J.) dated 7th November 2025 in HC.COMM. Case No. 29 of 2016) Ruling 1.The Notice of Motion dated 24th November, 2025 is brought under Rule 5(2)(b) of the Court of Appeal Rules. The Applicant seeks, in the main, an order of stay of execution of the ruling and resultant order of the High Court (Mongare, J.) delivered on 7th November, 2025 pending the hearing and determination of its intended appeal. The application is predicated on the grounds set out in the Motion and is supported by the affidavit of Kevin Santry, one of the directors of the Applicant while it is opposed through the replying affidavit sworn by Ngugi Kiuna on behalf of the 1st Respondent. The 2nd Respondent did not file any affidavit or submissions but appeared through counsel at the hearing of the application and supported it. 2.The background to the application, which we state only to the extent necessary for the determination of the two limbs under Rule 5(2)(b), arises from a long-running commercial dispute between the parties relating to a distributorship agreement for the supply and distribution of Heineken beer products in Kenya. The dispute culminated in a High Court judgment in 2019 in favour of the 1st Respondent, in which substantial damages were awarded but without an award of interest. Subsequent appellate processes, including proceedings before this Court and the Supreme Court, having run their course, the matter returned to the High Court for post-judgment processes, including taxation and determination of the question of interest. 3.By the impugned ruling, the High Court dismissed the Applicant’s reference challenging taxation and allowed the 1st Respondent’s application for the inclusion of interest, thereby significantly increasing the decretal exposure. Being aggrieved, the Applicant lodged a Notice of Appeal and has since filed an appeal challenging that determination. 4.In urging the application, the Applicant submits that its intended appeal is arguable and raises weighty questions of law and principle. Relying on Peter Munya v Kithinji & 2 Others [2014] KESC 30 (KLR), counsel submitted that under our Rule 5(2)(b) jurisprudence the threshold for arguability is low and that an applicant need only demonstrate a single bona fide issue deserving of consideration. It was contended that the appeal raises, among other issues, the question whether the High Court could award interest where none had been pleaded or granted at trial, whether such an award implicates the non- derogable right to a fair trial under Article 25(c) of the Constitution, whether the Deputy Registrar has jurisdiction to introduce interest post-judgment, whether Practice Directions can be applied retrospectively, and whether a Judge on reference can properly supply reasons not given by the Taxing Officer. In addition, the Applicant cited Republic v Minister for Agriculture & 2 Others ex parte Samuel Muchiri W’Njuguna & 6 Others [2006] eKLR and Premchand Raichand Ltd & Another v Quarry Services of East Africa Ltd & Another [1972] EA 162 to demonstrate that the challenge to the enhancement of instruction fees raises a bona fide point on the proper application of established taxation principles. 5.On the second limb, the Applicant submits that the decretal sum is colossal and that if paid out, the appeal would be rendered nugatory. Counsel placed reliance on Krystalline Salt Limited v Water Resources Management Authority [2018] KECA 155 (KLR) for the proposition that the magnitude of a decretal sum is a relevant consideration, and on Kenya Hotel Properties Limited v Willesden Investments Limited [2007] KECA 401 (KLR) for the argument that undue hardship is a proper factor in the exercise of this Court’s discretion. It was further contended that the 1st Respondent is no longer operational, and, therefore, incapable of refunding the decretal sum, and that execution would expose the Applicant to irreparable financial and reputational harm, including the risk of insolvency proceedings. 6.The 1st Respondent opposes the application and submits that it does not meet the threshold under Rule 5(2)(b). While not extensively contesting arguability, the 1st Respondent characterizes the intended appeal as frivolous and the application as an abuse of the court process. Its principal attack is directed at the nugatory limb. It submits that the Applicant has placed no credible or tangible evidence before the Court to demonstrate that the 1st Respondent would be unable to refund the decretal sum. It emphasizes that the burden of proof lies squarely on the Applicant and that mere allegations of impecuniosity are insufficient to discharge it. It further contends that impecuniosity, even if established, is not in itself a ground for stay and that it is entitled to the full and uninterrupted enjoyment of the fruits of its judgment. 7.Both the Applicant and the 1st Respondent filed written submissions. The 2nd Respondent did not file submissions but appeared through counsel at the hearing and indicated support for the application. 8.When the application came up for hearing on 4th March, 2026, Mr. Mailu, learned counsel, together with Mr. Kituku, appeared for the Applicant; Mr. Nyachoti, learned counsel, appeared for the 1st Respondent; while Ms. Aisha Abdalla, together with Mr. Sibayega, learned counsel, appeared for the 2nd Respondent. Counsel for the Applicant and the 1st Respondent indicated that they would rely on their respective written submissions. All counsel, however, made brief oral highlights and addressed the Court 9.The principles governing applications under Rule 5(2)(b) are well settled. In Stanley Kang’ethe Kinyanjui v Tony Ketter & 5 Others [2013] eKLR, this Court stated as follows:“In dealing with Rule 5(2)(b) the Court exercises original and discretionary jurisdiction and that exercise does not constitute an appeal from the trial Judge’s discretion to this Court. The discretion of this Court under Rule 5(2)(b) is wide and unfettered provided it is exercised judicially. The applicant must satisfy the Court on both limbs, that is, that the appeal or intended appeal is arguable and that unless the order sought is granted, the appeal, if successful, will be rendered nugatory.” 10.The Court further stated in the same decision:“On whether the appeal is arguable, it is trite law that an arguable appeal is not one which must necessarily succeed, but one which ought to be argued fully before the Court; one which is not frivolous.” 11.And as regards the second limb:“Whether or not an appeal will be rendered nugatory depends on whether or not what is sought to be stayed if allowed to happen is reversible, or if it is not reversible whether damages will reasonably compensate the party aggrieved.” 12.Guided by those principles, we first consider whether the intended appeal is arguable. As Stanley Kang’ethe Kinyanjui (supra) remarked, it is now settled that an arguable appeal is not one that must succeed but one that raises at least a single bona fide issue deserving of consideration. Having perused the draft Memorandum of Appeal and the submissions, we are satisfied that the issues raised are neither idle nor frivolous. In particular, the questions whether interest can be introduced post-judgment where it was neither pleaded nor awarded, whether such a course implicates constitutional fair trial guarantees, whether Practice Directions may be applied retrospectively, and the proper scope of a Judge’s intervention on a reference from taxation are all matters that merit interrogation by this Court. Without expressing any concluded view on the merits, we are satisfied that the first limb has been met. 13.We turn now to the second limb, namely whether the appeal would be rendered nugatory if the orders sought are not granted. The Applicant’s case rests on the magnitude of the decretal sum, the alleged inability of the 1st Respondent to refund it, and the risk of irreparable harm including insolvency proceedings. The 1st Respondent, on its part, maintains that no evidential basis has been laid to support the allegation of inability to refund and that it should not be deprived of the fruits of its judgment. 14.It is correct, as urged by the 1st Respondent, that the burden lies on an applicant to demonstrate that the appeal would be rendered nugatory and that bare assertions are insufficient. It is equally true, however, that the inquiry is not to be conducted in a vacuum but must be anchored in the practical realities of the case. 15.In the present case, the decretal sum is extraordinarily large and its immediate payment would, in all likelihood, irreversibly alter the parties’ positions in a manner that cannot be adequately remedied even if the appeal ultimately succeeds. While the Applicant’s evidence on the 1st Respondent’s ability to refund is not as robust as it might have been, the scale of the decretal exposure and the real risk of coercive execution processes — including insolvency proceedings — persuade us that the substratum of the appeal would be placed in jeopardy absent an order of stay. 16.At the same time, we cannot ignore the 1st Respondent’s legitimate entitlement to enjoy the fruits of its judgment. The justice of the case, therefore, lies, not in granting an unconditional stay, but in fashioning an order that strikes a fair balance between the competing interests of the parties. 17.In the result, we are persuaded that this is an appropriate case for the grant of a conditional stay. Accordingly, we order that there shall be a stay of execution of the ruling and resultant order of the High Court (Mongare, J.) delivered on 7th November, 2025 pending the hearing and determination of the appeal, on condition that the Applicant shall, within thirty (30) days from the date hereof, furnish a bank guarantee in the sum of Kshs. 250,000,000 (two hundred and fifty million) in favour of the Respondents. 18.In default of compliance within the stipulated period, the stay hereby granted shall lapse automatically. Costs of the application shall abide the outcome of the appeal. 19.It is so ordered. DATED AND DELIVERED AT NAIROBI THIS 29TH DAY OF MAY, 2026.JOEL NGUGI................................JUDGE OF APPEALNDUMA NDERI................................JUDGE OF APPEALMUNYAO SILA................................JUDGE OF APPEALI certify that this is a true copy of the original.SignedDEPUTY REGISTRAR