Brewing Storm: Senior Lawyers Expose Multibillion Shilling Sex Scandal at EABL as Arbitration Battle Explodes

Two of Kenya’s most prominent legal minds have lifted the lid on what could become the biggest corporate scandal to hit East African Breweries Limited, exposing a toxic cocktail of sexual harassment allegations, alleged corruption, and a desperate legal war to silence a 2.4 billion shilling arbitration claim.

Legal journalist Wahome Thuku and former Law Society of Kenya President Nelson Havi have independently dissected a labyrinthine legal battle that has now sucked in Kenya Breweries Limited, British multinational Diageo PLC, construction firm JILK, the Directorate of Criminal Investigations, and an arbitrator accused of impropriety.

At the heart of the explosive dispute lies Project Nafasi, a 15 billion shilling state-of-the-art brewery that KBL commissioned in Kisumu in 2016. What should have been a flagship investment has instead morphed into a legal nightmare featuring allegations of sexual assault against female workers, claims of money laundering, accusations of fabricated evidence, and a frantic bid to block an arbitrator from delivering his verdict.

The scandal began unraveling on January 5, 2020, when two female employees of JILK Construction filed a police report at Muthaiga Police Station claiming they were indecently assaulted and sexually harassed by Brendan Daly, the white project manager permanently stationed in Kisumu to oversee the brewery construction.

JILK formally lodged complaints with KBL management. The DCI swiftly initiated investigations, writing to KBL Managing Director on February 5, 2020. KBL acknowledged receiving the complaint through Corporate Relations Manager Eric Kiriti on February 12, 2020, but notably only after Daly had already left the country.

JILK Chief Executive Officer Sammy Maina has made a startling claim in court papers that supporting his female employees in their quest for justice against senior Diageo and KBL staff triggered a vendetta against him and his company.

“I believe that this petition and the hostility encountered during the arbitration proceedings are part of the scheme to teach me a lesson for supporting my female employees’s quest for justice,” Maina stated in his sworn affidavit.

KBL has dismissed the sexual harassment allegations, insisting Daly was employed by JAE Engineering, not KBL or Diageo, and that JILK never lodged formal complaints during the contract period from 2017 to 2019. They point out Daly was not even in Kenya when summoned by the DCI.

Maina fired back with damning evidence. He insists Daly was a Diageo employee whose official email address was @diageo.com.

He claims he personally raised the sexual harassment complaints during executive meetings with KBL management.

Going further, JILK alleges that JAE Engineering Ltd was merely a shell company used by Diageo PLC for money laundering and tax evasion through procurement and financial dealings.

The project itself was shrouded in controversy from the start.

The entire management team implementing Project Nafasi consisted of white expatriates with negligible involvement from KBL or EABL offices in Nairobi.

The team, led by senior Diageo official Nicholas Quirke based in Dublin who flew to Kisumu twice monthly, handled all procurement, financial dealings, and consultant engagements.

JILK has accused Diageo and KBL of operating in an opaque manner, even hiring foreign consultancy firms like South Africa’s Aurecon Group and Linesight Quantity Surveyors who were allegedly not registered with the Engineers Board of Kenya or other relevant Kenyan regulatory bodies.

As disputes mushroomed, the Architectural Association of Kenya appointed arbitrator Mutinda Mutuku in July 2020 to hear the matter.

On July 22, 2020, JILK submitted a massive 2.4 billion shilling claim against Diageo PLC. Curiously, KBL filed the response instead.

The arbitration proceedings dragged on acrimoniously for over four years. Then, just as the arbitrator was poised to deliver his award in late 2024, KBL launched a nuclear legal option.

On December 1, 2024, KBL filed a constitutional petition at the High Court seeking to quash the entire arbitration and stop Mutuku from delivering his verdict. They secured an ex parte conservatory order from High Court Judge Fridah Mugambi on December 5, 2024, valid for three months, halting all arbitration proceedings.

The petition hinges on a report allegedly prepared by an anonymous JILK whistleblower and forwarded to the DCI by KBL lawyers on July 26, 2022.

The report makes incendiary allegations that Mutuku and Maina colluded to rig the arbitration, with the JILK boss allegedly bribing the arbitrator to ensure a favorable determination. The whistleblower claimed to have attended meetings where the two discussed sharing the arbitration proceeds.

KBL accused the Architectural Association of Kenya of appointing Mutuku through deceit, failing to vet his impartiality and independence, and operating in secrecy and cronyism. They demanded the court compel the DCI to investigate.

Maina has denounced the entire petition as a fraudulent scheme.

He swears he has never interacted with Mutuku socially or professionally before or after his appointment, insists he is not a golfer and does not attend the same church as the arbitrator. He claims the whistleblower is pure fiction, a malicious fabrication procured by Diageo and handed to KBL to defeat justice.

Both the arbitrator and the DCI have denied the allegations.

JILK points out they had proposed three arbitrators before AAK appointed Mutuku, none of whom were selected by KBL.

Maina says he was unfamiliar with any Kenyan arbitrators and only learned Mutuku’s name after the appointment.

Nelson Havi, analyzing the case with surgical precision, raised devastating questions that cut to the heart of the matter.

Why are KBL and Diageo so desperate to prevent the arbitrator from delivering his verdict? Why did Judge Mugambi grant a three month ex parte order when such orders rarely exceed 14 days? Does the anonymous whistleblower actually exist, and has this person recorded a statement with the DCI?

Havi pointed to Section 10 of the Arbitration Act, which explicitly states courts shall not intervene in arbitration matters except as provided in the Act, enshrining the principle of non-interference. He questioned whether blocking delivery of an arbitration award through a constitutional petition was even legally permissible.

Most intriguingly, Havi asked why Diageo PLC, the majority shareholder in EABL but not a registered trading company in Kenya, appeared to have played the client’s role during execution of the Kisumu brewery works.

If JILK’s allegations prove true and the whistleblower report is indeed fabricated, Havi noted this would constitute a very serious criminal accusation against Diageo PLC and KBL.

The legal battle has taken on added urgency because Diageo is selling its shares in EABL and exiting Kenya by July. JILK wants the petition heard and determined before April 30, 2026, before the British giant disappears beyond the reach of Kenyan courts.

Havi observed that this triad of high stakes litigation could spiral into an even bigger legal controversy than the protracted fight between Diageo and Bia Tosha over unfair business practices.

The case exposes troubling questions about how multinational corporations operate in Kenya, the treatment of local contractors and workers, the handling of sexual harassment allegations against expatriate managers, and whether powerful foreign entities can manipulate the legal system to escape accountability.

As Kenyans await the unraveling of this corporate drama, one thing remains clear. Whether the truth lies with KBL’s corruption allegations or JILK’s claims of fabricated evidence and sexual harassment cover-ups, this scandal has already blown the lid off the cozy world where billion shilling contracts are executed in opacity, where female workers’ complaints can be dismissed or buried, and where the quest for justice can be derailed by legal maneuvers at the eleventh hour.

Havi’s parting shot captured the mood perfectly. Whatever happens, his main curiosity is reading the arbitrator’s verdict in the 2.4 billion shilling claim.

So is Kenya’s.