Blow to Bia Tosha as court rejects fresh bid to stop Sh300b EABL shares sale

Diageo PLC has a controlling stake in East African Breweries Limited. [Courtesy]

Bia Tosha Distributors Limited has suffered a major setback after the High Court dismissed its second attempt to halt the proposed Sh300 billion acquisition of Diageo PLC's controlling stake in East African Breweries Limited (EABL) by Japanese brewing giant Asahi Group Holdings.

In a ruling delivered on Tuesday, Justice Gregory Mutai rejected the distributor's second application dated May 4, 2026, seeking conservatory orders to preserve the status quo pending the hearing of its appeal at the Court of Appeal to halt Diageo's proposed US$2.3 billion sale of its 65 percent stake in EABL to Japan's Asahi Group Holdings.

"The application dated May 4, 2026, by Bia Tosha is in my view, without merit. The same is hereby dismissed with costs to the respondents, including EABL, KBL and Diageo PLC," Justice Mutai ruled.

The decision marks another defeat for Bia Tosha, which has been attempting to stop the transaction despite an earlier ruling by Justice Bahati Mwamuye on April 9, 2026, dismissing a similar application.

Justice Mutai noted that after Judge Mwamuye's ruling, Bia Tosha had sought directions from the High Court before electing to pursue conservatory orders before the Court of Appeal.

"The petitioner then opted to file an application for conservatory orders at the Court of Appeal," the judge observed, adding that although the application was certified urgent, no interim orders were granted.

Through its lawyers led by Kimani Kiragu, the distributor contended that it was merely seeking temporary conservatory orders to preserve the substratum of the case while awaiting the determination of its Rule 5(2)(b) application before the appellate court.

Bia Tosha argued that its latest application was not a repeat of a matter already decided and maintained that completion of the transaction would render any judgment hollow and unenforceable.

However, lawyers representing EABL, Kenya Breweries Limited (KBL), UDV (Kenya) Limited, and Diageo PLC strongly opposed the renewed application.
They faulted the timing, noting Bia Tosha had waited more than three weeks after the earlier ruling.

“The Applicant cannot sit on its rights and later ask the Court to treat its own delay as an emergency. That is not the basis upon which conservatory orders are granted,” the counsel argued.
“This is a classic case of forum shopping.The Applicant elected to go to the Court of Appeal. It must now follow that process,” Respondents counsel led by Kamau Karuri submitted.

At the heart of the dispute remains a decade-old commercial disagreement dating back to 2016, in which Bia Tosha alleges it paid goodwill of Sh38,298,000 for exclusive beer distribution rights across designated Nairobi routes, which it claims were unlawfully interfered with by KBL.

Bia Tosha, however, argued that preservation of the status quo is necessary to protect its appeal, arguing that completion of the transaction would effectively render any judgment hollow and unenforceable in practical terms.

The respondents maintain the dispute has no connection to Diageo’s corporate restructuring, arguing that the Kenyan subsidiaries remain fully operational and any change in upstream ownership does not affect contractual obligations within Kenya.
They also warned the court against intervening in a transaction of such magnitude at an interlocutory stage, arguing that even temporary orders could have far-reaching commercial consequences.

In his ruling, Justice Mutai found that while both courts have jurisdiction, they cannot exercise it concurrently over the same dispute.

"The court agrees that the High Court and the Court of Appeal may issue conservatory orders whenever their respective jurisdictions are invoked and having said so, the jurisdiction cannot be exercised concurrently," he said.
"Bia Tosha could either seek a conservatory or injunction pending appeal in this court or alternately the Court of Appeal. The petitioner opted for the latter option. My view is that the choice it made was definitive and binding on it and it cannot resign from the consequences of its choice."

The judge held that granting the orders would amount to the High Court supervising the appellate court.

"In my view, what the court is being invited to do is to superintend the Court of Appeal and I'm not convinced that I have the jurisdiction to do so," the judge ruled.
"Having opted to try its luck at the Court of Appeal, the petitioners may not now come back to the High Court. Such a course of action would not be respectful of the hierarchy of courts and may embarrass our judicial system."

Justice Mutai, however, agreed with the earlier findings that EABL and the other respondents remain domiciled within Kenya and that the subject matter of the petition would not be defeated by completion of the share sale.

The main petition will be mentioned on July 2, 2026.