Why High Court has dismissed Bia Tosha's bid to block Diageo's Sh300b EABL sale

Diageo Headquarters in London, UK. [File Courtesy] Beer distributor Bia Tosha Distributors Limited has suffered a major blow after the High Court dismissed its bid to block global drinks giant Diageo PLC from selling its 65 per cent shareholding in East African Breweries Limited (EABL) to Japanese multinational Asahi Group Holdings in a transaction valued at US$2.3 billion (approximately Sh300 billion). Justice Bahati Mwamuye of the Milimani High Court, in a ruling delivered virtually on Thursday last week, found that Bia Tosha had failed to establish a prima facie case with any direct connection to the conservatory orders it sought and that the application was fundamentally untethered from the underlying dispute between the parties. "The orders sought in this application, which seek to preserve the ownership, control and legal incidents of the 4th Respondent's (Diageo PLC) shareholding and to restrain it from divesting itself of assets, are not anchored in the substantive prayers of the Amended Petition," Justice Mwamuye held. The ruling caps a dramatic legal showdown that erupted in January 2026 when Bia Tosha rushed to court weeks after Diageo's December 18, 2025, public announcement of the landmark sale of its shareholding in EABLand and its Kenyan subsidiaries The small Nairobi-based beer and spirits distributor argued the divestiture would strip away the only known Kenyan asset of Diageo, an entity it described as a financially stressed foreign corporation bent on fleeing the jurisdiction with the proceeds. Asahi Group President and CEO Atsushi Katsuki and EABL Group MD Jane Karuku during the acquisition of Diageo PLC's shares in the company by Asahi Group. [File, Standard] The underlying dispute, which dates to June 2016, concerns a commercial falling-out between Bia Tosha and Kenya Breweries Limited over beer and spirits distribution routes in Nairobi and its environs. Bia Tosha claims to have paid goodwill of Sh38,298,000 for exclusive distribution rights over specified routes and accuses the respondents of breaching those arrangements. The case has traversed the entire Kenyan judicial hierarchy. The Supreme Court in February 2023 reinstated conservatory orders originally issued by the High Court in June 2016, which had been set aside by the Court of Appeal in 2020. Justice Mwamuye found that those 2016 orders, protecting Bia Tosha's distribution territory, remain intact and sufficient. "The existing conservatory orders issued on 29th June 2016 already preserve the core of the dispute," he ruled. A key plank of Bia Tosha's application was the claim that the respondents were contemnors who had defied court orders for ten years and therefore had no right to be heard. The court dismissed that argument in emphatic terms. "This assertion, which is advanced with considerable force and repeated throughout the Applicant's pleadings, is demonstrably incorrect when examined against the actual judicial record," Justice Mwamuye stated. He noted that Bia Tosha itself had twice conceded before the Court of Appeal that High Court judges had wrongly found the respondents in contempt, signing consent orders in February and December 2025 that set aside those rulings. "By entering into these consents, the Applicant is estopped from now asserting that the Respondents are contemnors without audience," the judge ruled. The court also rejected Bia Tosha's claim that allowing the share sale would render any eventual judgment unenforceable. Justice Mwamuye pointed out that EABL's Kenyan subsidiaries, Kenya Breweries Limited and UDV (Kenya) Limited, remain locally incorporated companies with substantial assets within the jurisdiction. On Diageo specifically, he noted the company is publicly listed in the United Kingdom and that reciprocal cross-border enforcement mechanisms exist between Kenya and the UK. "In the event that 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," he said. On Bia Tosha's claim of Diageo's financial distress, the court dismissed the claim, stating that: "The Court cannot act on speculation." Justice Mwamuye also weighed the wider economic consequences of halting the multi- billion deal. "Judicial interference with such a sale transaction, particularly at an interlocutory stage, would likely send a negative signal to the markets as well as foreign investors," he observed. He did, however, decline to find the application by Bia Tosha seeking urgent orders blocking the EABL sale as an abuse of court process, noting Bia Tosha was within its rights to move the Court, in good faith, in an attempt to provide itself with as secure a post-judgment position as it could. Justice Mwamuye, who is currently on transfer, however, set the matter for mention before the Presiding Judge of the Milimani Constitutional and Human Rights Division for directions towards an expedited hearing of the underlying petition. Diageo's planned transaction remains subject to regulatory approvals in Kenya, Uganda, and Tanzania, with closure expected in the second half of 2026.

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