The High Court has dismissed an application by JILK Construction Ltd seeking to stop the planned acquisition of shares in East African Breweries Plc (EABL) by Japan’s Asahi Group Holdings, in a transaction involving Diageo Plc.

In a ruling, Justice Gregory Mutai declined to grant orders sought by JILK to “stop, restrain or preserve” the transaction between Diageo and Asahi for the transfer of majority shareholding in EABL. The judge held that JILK’s claims—arising from a dispute with EABL subsidiary Kenya Breweries Limited (KBL)—could still be determined even if the share transaction proceeds.

The decision clears a legal hurdle around the deal, which was announced in December 2025 and is awaiting approval by the Competition Authority of Kenya (CAK), according to the document provided.

The case stems from a long-running dispute between JILK and KBL dating to 2019 over alleged unpaid construction work at Kisumu Brewery. The matter went to arbitration but was halted after KBL said it had uncovered issues including alleged collusion between the arbitrator and JILK, which KBL said inflated the disputed amount from KSh163 million to KSh2.4 billion, the document states.

Justice Mutai found that the contractor had not demonstrated grounds to freeze a corporate share transaction on the basis of its separate dispute with a subsidiary. “The judge said the claims by JILK, whose dispute is with EABL subsidiary Kenya Breweries Limited, can still be considered even if the transaction proceeds, and therefore would not warrant stopping the deal between Diageo and Asahi,” the document states.

The court also dismissed the application on the basis that it had not been shown that Diageo would “disappear” or become unreachable after the transaction. Justice Mutai further stated that EABL and KBL would remain in existence and, if Asahi becomes the main shareholder, it would be subject to Kenyan regulatory and legal processes.

In its reasoning, the court also referenced a prior attempt by a distributor, Bia Tosha, in which the court agreed that no sufficient nexus had been shown between a historical dispute and the share transaction. The judge held that a similar deficiency applied in JILK’s application, according to the document.

JILK had cited the United Nations’ Guiding Principles on Business and Human Rights, but Justice Mutai ruled that while the principles are important, the court was not persuaded they are binding as general rules of international law or as a ratified treaty.

On public interest, the judge held that it favours completion of the transaction due to “its significant public finance impact,” according to the document. The ruling also noted that JILK does not claim ownership of the shares being sold or seek payment out of the sale proceeds.

The case highlights the legal and regulatory scrutiny large cross-border transactions can attract in Kenya, particularly when legacy commercial disputes intersect with high-profile corporate activity. For investors, the decision reinforces the court’s stance that interim relief must be tied to a direct legal interest in the subject matter, and that disputes with operating subsidiaries may not be sufficient to halt shareholder-level transactions absent clear evidence of irreparable harm or risk of enforcement becoming impossible.

Next, market attention will shift to the CAK review process, which will determine whether the transaction can proceed under Kenya’s competition rules. No timeline was provided in the document, but the deal remains pending regulatory approval.