The High Court has dismissed an application by JILK Construction Ltd seeking to stop the proposed acquisition of majority shares in East African Breweries PLC (EABL) by Japan’s Asahi Group Holdings, clearing the way for the transaction to proceed through the regulatory approval process.
Justice Gregory Mutai declined to issue orders sought by the contractor to stop, restrain, or preserve the transaction between Diageo PLC and Asahi Group Holdings over the transfer of majority ownership in EABL.
The judge ruled that JILK’s claims, which arise from a dispute with EABL subsidiary Kenya Breweries Limited, could still be pursued even if the transaction proceeds, and therefore did not warrant blocking the deal.
Court Finds No Link Between Contractor Dispute and Share Sale
Justice Mutai said JILK had not demonstrated a sufficient connection between its historical dispute with Kenya Breweries Limited and the share transaction involving Diageo and Asahi.
The court also agreed with reasoning from an earlier case filed by distributor Bia Tosha, which similarly failed to establish a direct link between business disputes and the proposed ownership transfer.
The judge noted that JILK did not claim ownership of the shares being sold, nor did it demonstrate entitlement to proceeds from the transaction.
Diageo Not Expected to Disappear After Deal
The court rejected arguments that the transaction could make it difficult for JILK to pursue its claims, noting that there was no evidence Diageo would become unreachable after completion of the deal.
Justice Mutai observed that EABL and Kenya Breweries Limited would continue to exist as legal entities, while any new majority shareholder would remain subject to Kenyan laws and regulatory requirements.
Court Declines Human Rights-Based Argument
JILK had also relied on the United Nations Guiding Principles on Business and Human Rights in its application.
However, the judge ruled that while the principles are important, the court was not persuaded that they constitute binding rules of international law or a ratified treaty that could be used to stop the transaction.
Public Interest Supports Completion of Transaction
The court further held that public interest considerations favoured allowing the transaction to proceed, citing its potential impact on public finances and the broader economy.
The transaction between Diageo and Asahi was announced in December 2025 and remains subject to approval by the Competition Authority of Kenya.
Background of JILK Construction Dispute
JILK Construction has been involved in a legal dispute with Kenya Breweries Limited since 2019 over claims for payment for construction works carried out at Kisumu Brewery.
The matter was initially taken through arbitration but was halted after Kenya Breweries raised concerns over alleged irregularities, including claims of collusion between the arbitrator and JILK that allegedly increased the disputed amount from KSh163 million to KSh2.4 billion.
The High Court ruling now allows the proposed Asahi-Diageo transaction involving EABL to continue while the parties await regulatory clearance.