Microsoft loses Sh535m phones claim against ex-MP's firm
Former Kibwezi West MP PAtrick Musimba.
Microsoft Mobile OY has lost a bid to pursue over Sh535 million from a company linked to a former MP for supply of phones and accessories more than 15 years ago, after allegedly acquiring the debts of Nokia Corporation.
Microsoft Mobile claimed that Nokia supplied to Musimba Investments, whose director is former MP for Kibwezi West Patrick Musimba, phones and accessories worth $3,755,686.51 (Sh535.67 million) in December 2005, but the company did not pay for the goods.
High Court Judge Chacha Mwita dismissed the petition by Microsoft Mobile saying the firm failed to show that it had the right to claim the alleged debt after acquiring Nokia phones and accessories business in 2014.
“In the present case, there is no evidence that the plaintiff (Microsoft Mobile) suffered a legal injury to its legally protected right or interest. There is no evidence that the plaintiff had been refused something he had a right to demand from the defendant and the defendant had a corresponding duty to the plaintiff,” said the judge.
The court was informed that Musimba Investments Limited and Nokia Corporation entered into a deal on December 13, 2005, for the Kenyan firm to purchase and resale Nokia’s mobile phones and accessories in the country.
Nokia then filed a case on July 1, 2008, against Musimba Investments claiming an outstanding balance of $3,755,686 (Sh535.67 million) plus interest at the rate of 0.5 per cent per month from June 1, 2008, until payment in full.
In 2019, Nokia was substituted with Microsoft Mobile OY as the complainant. This was after Microsoft International Holdings BV entered into a stock and asset purchase agreement with Nokia in which Microsoft International acquired Nokia’s devices and service business including equity interest and assets.
The court was told that Microsoft International also assumed liabilities including all claims against third parties about Nokia’s devices and service business with effect from April 26, 2014.
Ms Otilia Estere Phiri, an employee of Microsoft East Africa Limited who was previously a legal counsel at Nokia Middle East & Africa FZ LLC, said following the acquisition Microsoft Mobile Oy took over interests in all claims causes of action by Nokia against third parties.
Ms Phiri testified that the phones that were being sold by Nokia were taken over by Microsoft International and that the suit fell under the claims that were acquired by Microsoft International.
She said there was no proof that Musimba Investments ever paid for the supplies.
Dr Musimba admitted that there was an agreement between him and Nokia, for the supply of 60,000 end-of-life handsets at 25 per cent of the list prices which money would assist Nokia offload the products.
He said Nokia did not, however, supply all the handsets and accessories agreed and paid for in advance.
According to the former MP, the money quoted was not the amount of the agreed discounted price but showed the balance of the full value of the handsets as opposed to the negotiated price which had been paid in full to Nokia.
He said Microsoft Mobile had no locus standi to maintain the case on behalf of Nokia Corporation because Microsoft International acquired the right to pursue this claim under the stock asset purchase agreement.
Dr Musimba said Microsoft Mobile did not also establish that the schedule of liabilities was passed on to it upon purchasing interest from Microsoft International.
The judge agreed saying Microsoft Mobile seems to have left a lot to be assumed.
“I find and hold that Microsoft Mobile OY did not satisfy that it had an adequate and direct interest in the subject matter of this litigation and the relief sought; that the interest was actual or that the interest was not too remote or hypothetical,” the judge said.
