Massive Loss: M-Pesa Users’ Sh300bn Court Battle Against Safaricom Ends in Defeat
The non-compliance of three Mpesa account holders with court orders has resulted in the dismissal of their lawsuit against Safaricom and its affiliate firms, in which they sought damages exceeding Sh300 billion.
On October 4, this year, High Court Judge Nixon Sifuna issued an order compelling the plaintiffs to submit the essential documents in support of their lawsuit against, among others, Safaricom, Vodafone Group Plc, MPesa Holding Company, and the Central Bank of Kenya.
The plaintiffs were provided with a deadline of 21 days to comply, failing which their lawsuit would be dismissed automatically.
The plaintiffs in this litigation, namely Gichuki Waigwa, Lucy Nzola, and Godfrey Okutoyi, requested several declarations, including an order mandating the disclosure of M-Pesa Holding Company Limited’s Annual Reports and Accounts from the time of its incorporation on September 11, 2006, until the present.
Additionally, they pursued an order to remove the corporate veil from Safaricom.
Representative Wilfred Nderitu, for the plaintiffs, acknowledged during the Wednesday hearing that he had not adhered to the court’s directives.
Except for expert witnesses, Nderitu demanded that a list of documents, a list of witnesses, and witness statements be submitted and served within fourteen days.
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“I apologize. I’m willing to burn the midnight oil to have the documents in by 14 days starting today,” he said.
However, Njoroge Rigeru, representing Safaricom, stated that Nderitu ought to have been more diligent in prosecuting the lawsuit because it involved a matter of public interest.
He stated that, per the orders of the judges issued on October 4, there is no pending lawsuit for argument.
“Your order was self-executing meaning this matter stood dismissed as from 25 October,” he told the Judge.
In a brief judgment, Justice Sifuna stated that a court order is not an essay that requires correction.
“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,” said the Judge.
According to him, since the case involved a public interest lawsuit, each party will be responsible for its expenses.
The court’s decision effectively nullified all remaining applications in the lawsuit.
Nevertheless, he stated that the Plaintiffs may submit a new lawsuit if they so choose.
“But let them do so with diligence. As the saying goes once bitten twice shy,” said the Judge.
The lawsuit was submitted in court by the plaintiffs in March of this year.
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The defendants are liable for Sh305 billion in damages due to their fraudulent misrepresentation, material non-disclosure of facts, unlawful and improper investment of funds from M-Pesa account holders, predatory lending practices, and the imposition of exorbitant interest rates.
Additionally, they had requested the court to determine that there has been no legal relationship between Vodafone Group Plc and M-Pesa Account holders since the service’s inception that would allow Vodafone Group Plc to be considered to have lawfully held M-Pesa Accountholders’ funds.
They requested that the court determine that funds belonging to M-Pesa Accountholders were illegally transferred to Vodafone Group Plc and commingled with funds of the Vodafone Group Plc, constituting unjust enrichment and illicit financial flows.
A declaration that the Fuliza overdraft service was illegal and unlawful due to the absence of a proper and effective regulatory framework, which resulted in predatory lending through the imposition of usurious interest rates, was also requested in their dismissed lawsuit.
Massive Loss: M-Pesa Users’ Sh300bn Court Battle Against Safaricom Ends in Defeat
