The High Court has rejected an application by Kenyan beverage marketing company, Wow Beverages, to block a South African wine maker, Namaqua Wines, from terminating their five-year distributorship deal amid a row over Sh450 million in claimed investments and goodwill.
The court found that the alleged exclusive distributorship was never formalised in a written contract. It declined to compel Namaqua Wines Distribution (PTY) Ltd to continue supplying wine to Wow pending determination of the main suit.
The court held that Wow’s claimed losses could be quantified and pursued as damages at trial.
In addition, the court dismissed Wow’s contempt application over Namaqua’s alleged failure to fulfil purchase orders and discharged the interim orders that had barred termination of the relationship.
‘The plaintiff is the author of its own misfortune having presented to the court an ambiguously worded prayer, which the court obliged by granting as prayed, but which, as it were, turned out to be uncertain,’ said the court, in a ruling that exposed the risks of unwritten distribution deals.
Wow, a local alcoholic-beverage business, sued Namaqua in October 2025 after the South African company gave notice that the relationship would end from November 1, 2025, citing product range, stock and payment concerns.
The dispute arose from a trading relationship that began in 2020 after Namaqua ended its arrangement with a previous Kenyan distributor and said it would deal directly with Wow.
Wow said that letter, dated September 11, 2020, created an exclusive arrangement through the parties’ conduct, although no formal agreement was signed.
It told the court that it had invested more than Sh150 million in staff, distribution infrastructure, marketing and warehousing while building goodwill it valued at more than Sh300 million.
It pleaded for payment of that amount, compensation for its efforts and investment, and upholding of its exclusive distributorship rights in Kenya.
The company’s General Manager, Anthony Kairu, insisted that it had a ‘legitimate and reasonable expectation that the distributorship relationship would last well over 10 years to justify this heavy investment’.
Namaqua disputed that position, saying each shipment was governed by separate purchase orders that it could accept or reject.
Its sales manager for Africa and the Middle East, Morné Koen, said consignments were supplied on 90-day credit terms, regardless of whether Wow had sold the wine or collected payment from customers.
He said Wow had repeatedly fallen behind those terms, forcing Namaqua to place its account on hold, and that the company was also dissatisfied with how the wine was being sold.
Namaqua further said it had never represented that Wow should make the investments claimed in the suit and denied that the relationship was exclusive.
Namaqua said the absence of a written agreement was because the relationship was not an exclusive distributorship, noting that Wow also sold liquor from other international manufacturers.
It said it terminated the deal because it was dissatisfied with how Wow sold its wines and also repeatedly failed to pay within the agreed 90-day credit period. Namaqua also denied requiring or encouraging Wow to make the investments it claimed.
In the ruling, the court said the evidence showed a trading relationship lasting about five years, but the documents pointed in different directions on exclusivity.
‘Whether those facts, taken together, disclose an implied exclusive distributorship of the kind the plaintiff asserts, or no more than a just discretionary trading arrangement terminable at will as the defendant asserts, is a matter of conflicting facts,’ the judge said.
The court also noted that Wow’s last reported arrears of ZAR225,360 (Sh1.7 million) had been paid on October 8, 2025, before Namaqua issued its termination letter.
The court nevertheless said Namaqua had repeatedly exercised discretion to accept or decline purchase orders, making it inappropriate to compel continued supplies under disputed terms.
‘Compelling the defendant, by injunction, to continue extending product supply and credit to the plaintiff pending trial would, in my view, curtail that apparent freedom,’ the court said.
It also rejected a mandatory order requiring Namaqua to continue the distributorship, saying the court could not compel supplies under terms whose precise content remained disputed.
The contempt application arose after Wow complained that Namaqua had failed to fulfil purchase orders submitted on July 28, 2025, despite the interim orders.
The judge found that Namaqua knew about the orders, but said the order requiring compliance with the distributorship terms did not clearly require every purchase order to be fulfilled.
‘Contempt requires proof of a wilful and deliberate violation of a clear and unambiguous command,’ the judge said.
The court also found that the purchase-order dispute and Namaqua’s explanations came before the October 30, 2025 court order, and therefore did not amount to defiance of the order.