EABL seeks CJ's intervention over conflicting court orders in Sh300b share sale

Asahi Group CEO Atsushi Katsuki and EABL Group MD Jane Karuku at a past event in Nairobi. [File Courtesy] 

East African Breweries PLC (EABL) has written to Chief Justice Martha Koome seeking intervention over conflicting High Court orders surrounding the proposed Sh300 billion sale of Diageo Plc's controlling stake in the brewer to Japan's Asahi Group Holdings Limited.

In a letter dated June 23, 2026, EABL, through its lawyers Iseme, Kamau & Maema Advocates, expressed concern over what it termed as parallel court proceedings, forum shopping and the risk of contradictory decisions from courts of equal jurisdiction, warning that the developments could undermine investor confidence and damage Kenya's reputation as an investment destination.

The move comes days after the Machakos High Court temporarily halted the transaction despite several judges in Nairobi declining to stop the deal.

Justice Josephine Mongare issued conservatory orders on June 18, restraining the Competition Authority of Kenya (CAK), Diageo Kenya Limited and other parties from taking any steps towards completing the acquisition pending the hearing of a petition filed by Christine Irungu.

"In the interim and pending the inter partes hearing and determination of this Application, a conservatory order is hereby issued restraining the 1st, 2nd, 3rd and 4th Respondents... from completing, implementing, registering, approving, transferring, disposing of or otherwise giving effect to the sale and/or transfer of Diageo's controlling interest in East African Breweries PLC to Asahi Group Holdings Limited," Justice Mongare ordered.

The judge further directed that the current ownership structure at EABL remain unchanged pending the hearing of the case.

The Machakos orders were issued barely hours after the High Court in Nairobi declined another application seeking to block the transaction.

In its letter to the Chief Justice, EABL noted that courts in Nairobi had repeatedly rejected attempts to stop the acquisition, including cases filed by Bia Tosha Distributors Limited, JILK Construction Company and other litigants.

"We respectfully write to bring to Your Ladyship's attention matters of considerable concern relating to the proliferation of parallel proceedings in different High Court stations, the apparent forum shopping that has accompanied such proceedings, and the resulting risk of conflicting orders by courts of concurrent jurisdiction in relation to the Transaction," the lawyers wrote.

According to EABL, the latest Machakos petition was filed on the same day that the High Court in Nairobi declined to grant orders stopping the transaction.

"Notwithstanding the publication of the determinations by the High Court at Nairobi both declining to restrain completion of the Transaction, on June  18, 2026, the same day the High Court in Nairobi declined to grant orders stopping the Transaction, a fresh Petition was filed before the High Court at Machakos," the letter states.

The brewer argues that litigants opposed to the transaction are engaging in forum shopping by seeking similar orders in different courts after failing to obtain them elsewhere.

"It is our client's view that the Machakos proceedings constitute a strategy to secure from a different High Court station relief that had already been declined by the High Court at Nairobi," the advocates said.

"Our client is concerned that persons desirous of hindering the completion of the transaction are now engaged in forum shopping across separate High Court stations, removed from the locus of the Transaction and the parties, in an effort to obtain orders previously refused."

EABL further faulted the issuance of ex parte conservatory orders affecting a transaction valued at approximately USD 2.3 billion.

"The conservatory orders were granted ex parte yet they bring to a complete halt a transaction valued at approximately USD 2.3 billion which will result in a capital gains tax payment to the Government of Kenya in the range of Sh 40-42 billion," the lawyers stated.

The company warned that continued issuance of conflicting orders risks creating uncertainty for investors, shareholders, employees and regulators.

"The continued issuance of conflicting and forum-shopped orders sends a damaging signal to local and international investors regarding the predictability and reliability of Kenya's judicial system and its capital markets," the letter says.

EABL is now asking the Chief Justice to designate a single High Court judge in Nairobi to hear all matters relating to the transaction and issue directions to prevent parallel litigation.

The proposed acquisition, announced in December 2025, would see Asahi acquire Diageo's controlling stake in EABL in a deal expected to generate about Sh42 billion in capital gains tax for the government.

The transaction had received approvals from regional regulators and was awaiting final clearance from the Competition Authority of Kenya before the latest court challenge emerged.