KBL Alleges Plot to Inflate KSh163 Million Claim to KSh2.4 Billion in Kisumu Brewery Dispute

A legal dispute between Kenya Breweries Limited and JILK Construction Limited over construction works at the Kisumu brewery has escalated into a high-stakes battle over a contested arbitration award.

The dispute, which initially involved a claim of KSh163 million, later ballooned to KSh2.4 billion during arbitration proceedings—an outcome that Kenya Breweries has challenged, alleging that the process was compromised.

The disagreement stems from renovation works carried out at the Kisumu brewery plant, which was reopened in 2019. While the contractor had invoiced the company for additional payments related to the project, the two parties disagreed on the final amount owed.

To resolve the dispute, the matter was referred to arbitration. However, Kenya Breweries now claims that the figure in contention was dramatically inflated during the arbitration process.

According to the company, the dramatic increase in the amount under dispute raised concerns about possible conflict of interest and misconduct during the arbitration proceedings.

The case took another turn after Kenya Breweries received a whistleblower report in July 2022 alleging bias and corruption in the arbitration process. The company forwarded the allegations to the Directorate of Criminal Investigations for further investigation.

JILK Construction has rejected the accusations, describing the whistleblower claims as fabricated and insisting that the arbitration award was reached lawfully.

The dispute has also drawn attention to actions taken outside the courtroom, including legal applications, public statements and attempts to challenge judicial officers involved in related proceedings.

In one instance, lawyers representing the contractor wrote to the Chief Justice seeking the removal of a magistrate handling a private prosecution application connected to the dispute.

Court records show the magistrate had declined to treat the application as urgent and directed that it be served on the Office of the Director of Public Prosecutions before the matter could proceed.

Legal observers say the case raises important questions about the handling of commercial disputes and the role of arbitration in resolving major corporate conflicts.

As the matter proceeds through the courts, both parties are expected to present evidence supporting their positions, with the judiciary tasked with determining whether the contested arbitration award will stand.

The outcome of the case could have broader implications for Kenya’s commercial dispute resolution system, particularly as the country seeks to strengthen its reputation as a reliable destination for arbitration and investment.