Judge recuses herself in Sh3 billion Kenya Breweries commercial dispute

High Court Judge Freda Mugambi has recused herself from hearing a petition by Kenya Breweries Limited (KBL) seeking to terminate Sh3 billion arbitration proceedings against construction giant JILK Construction Company Limited. When the matter came up for directions yesterday, Justice Mugambi disqualified herself from further handling the commercial dispute, citing conflict of interest concerns. She directed that the case be placed before the Principal Judge of the Commercial Division for reassignment to a new judge on February 19, 2026, and for further directions. "I have decided to recuse myself from hearing this matter to avoid any appearance of bias or conflict of interest. It is in the interest of justice that the case be reassigned to another judge for impartial determination," Justice Mugambi said. The judge's decision to step aside in the matter dealt a major setback for JILK Construction, which had sought for the petition to be heard and determined before April 30, 2026. The construction company wants the matter heard urgently because Diageo PLC - the London-based multinational that is the majority shareholder in KBL/EABL, is set to exit the Kenyan market by July 31, 2026, having sold its stake to Japan's Asahi Group Holdings. The petition, filed in December 2024 by KBL through lawyer Kamau Karuri, alleges corruption and collusion in an ongoing arbitration between arbitrator Mutinda Mutuku and JILK CEO Sammy Maina Kamau over the construction of the Kisumu brewery. At the heart of the dispute lies Project Nafasi, the construction of a modern brewing factory in Kisumu valued at approximately Sh1.5 billion. Between October 2017 and March 2018, JILK was contracted by KBL for civil works on what was touted as the single largest private investment in Western Kenya since independence. The project promised to transform the region's economy, incorporating over 15,000 sorghum farmers into KBL's supply chain and creating employment for over 100,000 people. However, disputes erupted during execution, with JILK abandoning the site in November 2019 after receiving approximately Sh1.2 billion in payments. What began as a Sh163 million claim by JILK has since mushroomed into an astounding Sh 2.4 billion demand, an increase of over 1,372% that KBL alleges is part of an elaborate extortion scheme. In July 2020, the Architectural Association of Kenya (AAK) appointed quantity surveyor Mutinda Mutuku as arbitrator to hear the dispute. The arbitration proceeded for four and a half years, with JILK filing final submissions in August 2024 and KBL in November. Just before the arbitrator could deliver his verdict, KBL filed the petition, alleging that the arbitrator and JILK CEO Maina had been colluding with Mutuku to secure a favorable ruling. According to KBL's petition, the allegations are based on a whistleblower report that was forwarded to the Directorate of Criminal Investigations on July 26, 2022. The report claimed the two had been holding secret meetings to predetermine the arbitration outcome, inflate claims, and share the proceeds of what KBL terms a "grand corrupt scheme." The petition details payments Mutuku allegedly received from JILK: Sh174,000 on July 26, 2019, and Sh150,000 on January 22, 2020, just weeks before he was appointed arbitrator on February 19, 2020. KBL accuses Mutuku of hiding his professional relationship with JILK, inflating arbitration fees through double-billing, and showing systematic bias during proceedings. The brewer claims it paid approximately Sh1.2 billion of the Sh1.5 billion contract value before JILK walked away. JILK CEO Maina has dismissed the allegations as fabrication. "The Petition is founded on a fraudulent and fabricated report of a fictitious and anonymous whistle-blower procured by Diageo PLC and handed over to KBL to use in frustrating the cause of justice," Maina stated in court documents. He maintains the petition is part of a malicious scheme by KBL to tarnish the name of his company to escape civil and criminal responsibility for the actions of their employees and consultants. At the same time, KBL CEO Jane Karuku and Group Corporate Relations Director Eric Kiniti have filed an urgent application to be joined as interested parties in the suit for the limited purpose of defending their reputations after being adversely mentioned. Karuku and Kiniti, through lawyer Cecil Miller, expressed alarm at being dragged into the commercial dispute between KBL and JILK. Miller's application, filed on January 20, 2026, claims that JILK has made vexatious, scandalous, and unsubstantiated allegations against his clients, amounting to abuse of judicial privilege. "The 2nd Respondent has, without justifiable cause, weaponized this commercial dispute to launch a collateral attack on the reputations of the Intended Interested Parties, who are strangers to the Arbitration, solely to exert extortionate pressure on the Petitioner (KBL)," Miller stated in the Certificate of Urgency filed before the court. Miller further argued that his clients' constitutional rights were at stake due to JILK's court filings. "The Applicants seek to safeguard their constitutional rights to equal protection before the law, right to dignity, and a fair hearing as guaranteed under Articles 27(1), 28, and 50(1) of the Constitution, and to protect the dignity of this Court from being used as a platform for malicious slander," the application reads. Miller emphasised that unless the application is heard urgently, Karuku and co-applicant Kiniti stand to suffer grave prejudice, as they will be denied an opportunity to respond to, controvert, and seek the expunging and striking out of the vexatious, scandalous, and unsubstantiated allegations leveled against them by JILK before the matter proceeds to judgment. The matter returns to court next Thursday for mention and further directions.

Judge recuses herself in Sh3 billion Kenya Breweries commercial dispute

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