Goodwill as Constitutionally Protected Property: High Court Case of Bia Tosha Distributors v Kenya Breweries, EABL, Diageo

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“I am acutely aware of the far reaching consequences of my conclusive finding that purely constitutional issues and questions have been borne out of a hitherto commercial relationship and hence the court’s jurisdiction rather than agreed mode of dispute resolution. I however do not for a moment view it that the framers of our Constitution intended the rights and obligations defined in our common law, in this regard, the right to freedom of contract, to be the only ones to continue to govern  interpersonal relationships.” – Onguto, J at paragraph 101 of the ruling.

A recent well-reasoned ruling by the High Court in the case of Bia Tosha Distributors Limited v Kenya Breweries Limited & 3 others [2016] eKLR  tackled the complex question of horizontal application of the Constitution to private commercial disputes governed by contracts with private dispute resolution mechanisms. More interestingly, the court had to consider whether the amount of Kshs. 33,930,000/= paid by the Petitioner to acquire a ‘goodwill’ over certain distribution routes or areas of the Respondents’ products can be defined as ‘property’ held by the Petitioner and as such protected under Article 40 of the Constitution.

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