Win for Safaricom as court throws out Sh300b case

It is a big win for Safaricom and the United Kingdom-based firm Vodafone after the High Court sitting in Nairobi yesterday struck out a Sh300 billion case filed against it by three consumers of Mpesa services.

Dismissing the case, Justice Nixon Sifuna said that the three petitioners among them lawyer Gichuki Waigwa, Lucy Nzola and Godfrey Okutoyi failed to comply with the orders of court issued on October 4, 2023.

Sifuna had on October 4 ordered the plaintiffs in the suit to file the necessary documents required to support their suit against Safaricom, Vodafone Group Plc, Mpesa Holding company, and Central Bank of Kenya among others.

The Judge had given them 21 days to comply with the directive failure to which their suit would be automatically dismissed.

The three petitioners who had filed the suit on behalf of over 52 million Mpesa subscribers were seeking over Sh300 billion from Vodafone.

They wanted the court to find that Mpesa business was and is meant to be a banking business and should have been regulated by the CBK. When the matter came up for hearing yesterday, the petitioners through

Wilfred Nderitu admitted that he had not complied with the court’s directions.
Nderitu requested not more than 14 days to file and serve a list of documents, a list of witnesses, and witness statements except for expert witnesses.

“I apologise. I’m willing to burn the midnight oil to have the documents in by 14 days starting today,” he said.
But Safaricom, represented by Njoroge Regeru said Nderitu should have been more diligent to prosecute the suit on account of it being a public interest matter.

He said going by the Judges’ orders issued on October 4, there is currently no suit to be argued out.
“Your order was self-executing meaning this matter stood dismissed as from 25 October,” he told the Judge.

While declaring that there exists no suit, Judge Sifuna said that court orders were not issued in vain.

“It must be obeyed. They are not made in vain. The October 4 order was clear and self-executing. Due to the plaintiff’s inactivity and consistent noncompliance with the said order, they have dismissed their suit. There being no applications by them for revival or reinstatement of the suit, let it rest in peace,” ruled Justice Sifuna.

The judge further said the three petitioners admitted before him they did not comply with the court orders.

Further, the judge ruled that the applications by Safaricom and Vodafone to have the case referred for arbitration equally ‘dies’ with the petitioner’s case.

The judge struck out the suit after the three petitioners failed to serve suit papers and evidence to the 21 defendants.

Self regulating

Declaring the suit non-existent, Justice Sifuna said the orders he had given on October 4 were self regulating and he had directed that plaintiffs should serve the suit papers within 21 days which they failed to to-date.

In the case filed on March 1, 2023, the petitioners wanted the court to compel Vodafone to refund more than Sh300 billion which they claim belongs to MPesa account holders.

They sought Sh305 billion in damages from the defendants for fraudulent misrepresentation, material non-disclosure of facts, illegal and unlawful investment of MPesa account holders’ funds, predatory lending practices, and charging of exorbitant interest rates.

The three petitioners had sued Safaricom Plc, Vodafone Group Plc, Vodafone Kenya Limited, and M-Pesa Holding Company Limited.

Also sued were Vodafone International Holdings B.V, M-Pesa Foundation Charitable Trust, Safaricom Foundation Charitable Trust, and Carepay Limited among others.

The petitioners also targeted Fuliza, arguing that it is a banking service that is not regulated by law.