Court hears that agreement breaches by Heineken have cost Nash €10m

HEINEKEN Ireland’s alleged breaches of a joint venture agreement have resulted in well over €10 million losses for the Nash drinks company, it has been claimed before the Commercial Court.

The proceedings by Hartside, an Isle of Man-based company, against Heineken Ireland were transferred to the Commercial Court this week by Mr Justice Peter Kelly.

Hartside claims it and Heineken, then named Murphy Brewery Ireland, entered into a JVA with several other parties in November 1996 for the acquisition and ownership of Nash Beverages.

A number of ancillary agreements were also entered into, including a management agreement between Hartside and Heineken and a keg delivery agreement, it is claimed.

Hartside claims the business of the joint venture, including keg delivery and wholesale drinks distribution, was to be conducted under the terms of the JVA. The intention was to manage the business in accordance with best business practice and to maximise the value of the company, it said. It is claimed Heineken has breached the terms of the JVA and the management agreement in taking steps which had the effect of advancing Heineken’s own interests and depressing the value of NBL.

These steps include Heineken restricting the company engaging in parallel importing, preventing meaningful reform of the company’s wholesale distribution business and failing to ensure control systems were put in place to prevent stock fraud and other stock discrepancies.

It is claimed Heineken also passed on unauthorised costs to the Nash company. Heineken is also alleged to have restricted NBL from sourcing cheaper product via parallel imports which would have increased NBL’s profits. It is also alleged Heineken has procured and/or conducted the management of the wholesale distribution business of NBL in such a way as to needlessly incur losses.

Hartside is seeking orders compelling Heineken to comply with its obligations under the JVA. Hartside claims the NBL business is viable and can flourish if the JVA is operated as intended.