Court dismisses petition seeking to stop EABL-Diageo shares deal

In a ruling delivered on Tuesday, Justice Gregory Mutai declined to grant conservatory orders that would have stopped, restrained, or preserved the Diageo–Asahi share transaction pending the hearing and determination of a petition filed by JILK Construction.

The company had moved to court arguing that the transaction should not proceed, citing concerns linked to a long-running dispute involving Kenya Breweries Limited (KBL), EABL and other parties.

However, the judge found that JILK Construction had failed to establish sufficient grounds to justify stopping the transaction.

Justice Mutai noted that the petitioners neither claimed ownership of the shares being sold nor sought payment from the proceeds of the transaction. He observed that the issues raised by JILK largely stemmed from historical disputes already the subject of arbitration, commercial proceedings and other litigation.

The court further held that the reliefs sought in the petition were largely declaratory in nature and could still be determined even if the share sale proceeds.

In dismissing the application, the judge noted that EABL and KBL would continue to exist after the transaction, while Diageo had not been shown to be exiting the jurisdiction in a manner that would make it unreachable. He added that if Asahi becomes the majority shareholder, it would remain subject to Kenyan laws, regulatory oversight and court processes.

Justice Mutai also agreed with findings made in an earlier related case, holding that no sufficient connection had been demonstrated between the historical dispute raised by JILK and the proposed share transaction.

While acknowledging the importance of the United Nations Guiding Principles on Business and Human Rights, the court held that it was not persuaded that the principles constitute binding rules of international law or a treaty ratified by Kenya.

The judge further found that public interest weighed in favour of allowing the transaction to proceed, citing its significant implications for public finance and investment.