Safaricom Faces Legal Battle Over Contract Dispute With Former Dealer
TLDR
- Safaricom is facing a legal challenge from Goodweek Inter-Services, a longtime dealer, over its removal from the company’s dealership network
- Goodweek, which had sold M-PESA services, SIM cards, and Safaricom merchandise since 2002, lost access to Safaricom’s Online Dealer Trading Portal in April 2024
- Goodweek contends that Safaricom’s contract renewal process left no room for negotiation, forcing dealers into one-sided agreements
Kenya’s largest telecom operator, Safaricom, is facing a legal challenge from Goodweek Inter-Services, a longtime dealer, over its removal from the company’s dealership network. The dispute, now before the High Court of Kenya’s Constitutional and Human Rights division, centers on allegations that Safaricom used its market dominance to impose unfair contract terms.
Goodweek, which had sold M-PESA services, SIM cards, and Safaricom merchandise since 2002, lost access to Safaricom’s Online Dealer Trading Portal in April 2024 after failing to renew its dealership contract. Safaricom argues that the contract expired automatically, as over 400 other dealers renewed their agreements without issue.
Goodweek contends that Safaricom’s contract renewal process left no room for negotiation, forcing dealers into one-sided agreements. The firm is also bringing Vodafone Plc, Vodafone Kenya Limited, and Mobitelea Ventures Limited into the case, suggesting a broader issue with Safaricom’s international affiliates.
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Key Takeaways
The outcome of this case could set a precedent for how dominant telecom firms engage with dealers in Kenya. If Goodweek wins, the ruling may lead to greater regulatory scrutiny on Safaricom’s contracts and business practices. Safaricom insists that the matter should have been resolved through arbitration, as stipulated in the contract, rather than in court. The inclusion of Vodafone and Mobitelea adds another layer of complexity, potentially broadening the case beyond a simple contract dispute. As Kenya’s telecom sector continues to evolve, the case may influence how regulators and courts approach competition and fair market practices between large corporations and smaller business partners.
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