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Supreme CourtStruck OutPetition (Application) E027 & E028 of 2024 (Consolidated)

Heineken East Africa Import Company Limited & another v Heineken International BV & 2 others

Supreme Court of Kenya
18 October 2024
6,783 words in judgment
View original judgmentRead on Kenya LawDownload the judgment (PDF) Watch case
AI-assisted case brief
·~27 min to read original · ~4 min brief

The bottom line

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Supreme Court won't hear contract disputes disguised as constitutional appeals.

What this practically means

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The Supreme Court has struck out two appeals from Heineken, ruling that the dispute was about contract law, not the Constitution. The Court of Appeal's decision turned on whether a distribution agreement was validly terminated, not on interpreting any constitutional provision. Even though Article 10 of the Constitution was mentioned briefly, it wasn't central to the case. This means the Supreme Court had no legal power to hear the appeals.

Executive summary

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This ruling by the Supreme Court of Kenya (Koome CJ, Mwilu DCJ, Ibrahim, Wanjala, and Njoki Ndungu SCJJ) disposes of four applications arising from two consolidated petitions (E027 of 2024 and E028 of 2024) challenging the Court of Appeal's judgment of May 24, 2024. The petitioners, Heineken East Africa Import Company Limited and Heineken International BV, sought stay of execution of the Court of Appeal judgment, while the respondent, Maxam Limited, sought to strike out the petitions for want of jurisdiction under Article 163(4)(a) of the Constitution. The core dispute originated from a Distribution Agreement between the parties, with the High Court having awarded Maxam Limited Kshs 1,799,978,868.00 in special damages for loss of business. The Court of Appeal upheld this award, finding a repudiatory breach of contract. The petitioners argued that the Court of Appeal had erroneously invoked Article 10 of the Constitution suo moto, thereby raising constitutional issues warranting Supreme Court jurisdiction. The Supreme Court examined the genesis of the dispute and the decisions of the lower courts, applying its settled jurisprudence on jurisdiction under Article 163(4)(a). It found that the main issue before both the High Court and Court of Appeal was the validity of the termination notice under the Distribution Agreement, not the interpretation or application of the Constitution. The Court of Appeal's references to Article 10 were peripheral and did not affect its final decision, which was based on contract law principles of repudiatory breach. Consequently, the Supreme Court held that it lacked jurisdiction, allowed the respondent's applications to strike out the petitions, struck out the stay applications, and ordered no costs. The security deposits were directed to be refunded to the petitioners.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether this court has jurisdiction under Article 163(4)(a) of the Constitution to hear and determine the appeals.
  2. 2.Whether the appeals involve the interpretation or application of the Constitution.
  3. 3.Whether the Court of Appeal's decision was based on constitutional interpretation or on contract law principles.

Key legal issues

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01

Whether the Supreme Court has jurisdiction under Article 163(4)(a) of the Constitution to hear appeals from the Court of Appeal where the Court of Appeal's decision was based primarily on contract law, with only peripheral reference to constitutional provisions.

Holding

The Supreme Court lacks jurisdiction under Article 163(4)(a) where the Court of Appeal's decision was based on contract law principles (repudiatory breach) and not on the interpretation or application of the Constitution, even if there was some mention of Article 10 of the Constitution.

Reasoning

The court examined the genesis of the dispute, which was a Distribution Agreement. The High Court and Court of Appeal both focused on the validity of the termination notice and repudiatory breach. The Court of Appeal expressly held that the law of contract was sufficient and that the trial court erred in applying public law principles. The references to Article 10 were peripheral and did not affect the final decision. The court applied its precedents in Lawrence Nduttu, Hassan Joho, and Aviation & Allied Workers Union to conclude that the appeals did not meet the jurisdictional threshold.

02

Whether the Court of Appeal's invocation of Article 10 of the Constitution in interpreting contract law transforms a contractual dispute into a constitutional one for purposes of Supreme Court jurisdiction.

Holding

No. The mere invocation of Article 10 as a guiding principle in contract interpretation does not make the case one involving the interpretation or application of the Constitution under Article 163(4)(a).

Reasoning

The court noted that the Court of Appeal mentioned Article 10(2) but only to aid the court; it had no impact on the final decision. The appellate court even held that the law of contract was sufficient. The Supreme Court distinguished between cases where constitutional provisions are central to the decision and those where they are merely referenced in the spirit of the constitutional order. The court cited Aviation & Allied Workers Union to support that broad references to constitutional values do not confer jurisdiction.

Legal principles established

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  • An appeal to the Supreme Court must genuinely involve interpreting or applying the Constitution, not just mention it.
  • Mere references to constitutional values like Article 10 do not turn a contract dispute into a constitutional case.
  • The Supreme Court has no jurisdiction if the main issue is purely contractual, even if constitutional language appears in the judgment.
  • A court's use of constitutional principles as guidance only, without affecting the outcome, does not invoke Supreme Court jurisdiction.
  • The party seeking Supreme Court review must show the constitutional issue was central, not peripheral.

Court orders

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  1. 1.The notice of motion application dated June 26, 2024 and filed on June 26, 2024 be and is hereby allowed.
  2. 2.The notice of motion application dated July 8, 2024 and filed on even date be and is hereby allowed.
  3. 3.The notice of motion application dated June 24, 2024 and filed on June 27, 2024 is hereby struck out for want of jurisdiction.
  4. 4.The notice of motion application dated June 1, 2024 and filed on June 13, 2024 is hereby struck out for want of jurisdiction.
  5. 5.The Petition of Appeal No E027 of 2024 dated June 1, 2024 and filed on June 13, 2024 is hereby struck out for want of jurisdiction.
  6. 6.The Petition of Appeal No E028 of 2024 dated June 24, 2024 and filed on June 27, 2024 is hereby struck out for want jurisdiction.
  7. 7.The sum of Kshs 6,000/= deposited as security for costs in Petition of Appeal No E027 of 2024 and Appeal No E028 of 2024 herein be refunded to the petitioner.
  8. 8.There shall be no orders as to costs.

The bench

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One judgment of the whole court — no separate or dissenting opinions.

Martha Karambu Koome
M. K. KoomeCJ
Currently serving
majority

Wrote the judgment

Philomena Mbete Mwilu
P. M. MwiluDCJ
Currently serving
majority
majority
Smokin Charles Wanjala
S. C. WanjalaSCJ
Currently serving
majority
Njoki Susanna Ndungu
Njoki NdunguSCJ
Currently serving
majority
On appeal from
Court of Appeal at Nairobi
Civil Appeal No 403 of 2020 as consolidated with Civil Appeal No E404 of 2020
Jurisdiction invoked
Article 163(4)(a) of the Constitution
Consolidated with
Petition No E028 of 2024

Relief refused

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Stay of execution of the Court of Appeal judgment

The court lacked jurisdiction to entertain the appeals, so the stay applications fell by the wayside.

Costs

There shall be no orders as to costs.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

it is not the mere allegation in pleadings by a party that clothes an appeal with the attributes of constitutional interpretation or application.
p. 10 Jurisdiction under Article 163(4)(a)
where the interpretation or application of the Constitution has only but a limited bearing on the merits of the main cause, then the jurisdiction of this court may not be properly invoked.
p. 13 Limited constitutional bearing insufficient for jurisdiction
The Petition of Appeal No E027 of 2024 dated June 1, 2024 and filed on June 13, 2024 is hereby struck out for want of jurisdiction;
p. 14 Final order striking out petition
The Petition of Appeal No E028 of 2024 dated June 24, 2024 and filed on June 27, 2024 is hereby struck out for want jurisdiction;
p. 14 Final order striking out petition
There shall be no orders as to costs.
p. 14 Costs order

Key timeline

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2024-05-24
Court of Appeal issues judgment upholding High Court award of Kshs 1.8 billion for repudiatory breach of contract.
2024-06-01
Heineken files Petition of Appeal No E027 of 2024 at the Supreme Court.
2024-06-13
Heineken files notice of motion for stay of execution.
2024-06-24
Heineken files Petition of Appeal No E028 of 2024 at the Supreme Court.
2024-06-26
Heineken files another stay application.
2024-07-08
Maxam Limited files applications to strike out the appeals for lack of jurisdiction.
2024-11-28
Supreme Court strikes out all appeals and related applications, orders refund of security deposits.

Practical implications

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For lawyers

Limit on Supreme Court Appeals

When framing appeals to the Supreme Court, ensure the core issue involves interpretation or application of the Constitution. If the Court of Appeal decided on contract or common law grounds, with only passing reference to constitutional provisions, your appeal will be struck out. Draft notices of appeal and petitions to clearly identify how the constitutional question was central, not peripheral.

For businesses

Contract Disputes Stay in Lower Courts

If you have a commercial contract dispute, even if it involves national values like those in Article 10, the Supreme Court will not hear it unless the constitutional issue is the main basis of the Court of Appeal's decision. Your appeals will end at the Court of Appeal. Plan for finality at that level and secure enforcement of judgments promptly.

For individuals

Don't Rely on Constitutional Keywords

If you're involved in a contract case, including constitutional language in your pleadings won't automatically get you to the Supreme Court. The court will look at whether the constitutional issue was actually decided. For individuals, this means your appeal rights are limited to the Court of Appeal for most commercial or contractual matters.

Frequently asked questions

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Can I appeal a contract dispute to the Supreme Court of Kenya if the Court of Appeal mentioned the Constitution?+

No, not automatically. The Supreme Court must decide if the constitutional issue was central to the case, not just mentioned. In Heineken v Maxam, the court found that brief references to Article 10 did not make it a constitutional appeal.

What is required for the Supreme Court of Kenya to hear an appeal under Article 163(4)(a) in Kenya?+

The appeal must originate from a Court of Appeal case where the main issue was the interpretation or application of the Constitution. If the lower courts decided on contract or statutory grounds, even with some constitutional language, the Supreme Court may lack jurisdiction.

Does mentioning national values and principles of governance make a case constitutional in Kenya?+

No. As the Supreme Court clarified in Heineken v Maxam, invoking Article 10 as a guiding principle does not transform a contract dispute into a constitutional matter. The constitutional provision must be central to the court's decision.

What happens if the Supreme Court of Kenya strikes out an appeal for lack of jurisdiction?+

The appeal is dismissed without a hearing on the merits. Any security deposits (like the Kshs 6,000 here) are refunded. Usually, no costs are awarded. The decision of the Court of Appeal stands final.

Cite this brief

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Cite this brief

Caselaw, "Heineken East Africa Import Company Limited & another v Heineken International BV & 2 others", Case Analysis (2024). Petition (Application) E027 & E028 of 2024 (Consolidated). Source: https://new.kenyalaw.orghttps://new.kenyalaw.org/akn/ke/judgment/kesc/2024/59/eng@2024-10-18

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.