Kenyan artistes' royalties at stake as court overturns CMO licences
File photo of artistes in a peaceful demonstration in Nairobi.
The High Court has cancelled the operating licences of collective management organisations (CMOs) issued by the Kenya Copyrights Board (Kecobo).
The ruling could affect the distribution of royalties to artistes by the three registered CMOs - Performers Rights Society of Kenya (PRISK), Music Copyright Society of Kenya (MCSK) and Kenya Association of Music Producers (KAMP).
The three CMOs collect over Sh600 million annually as royalties payable to Kenyan artists.
However, there is still an outcry from artistes over the way the royalties are distributed.
Delivering judgment on Tuesday in petition No. E161 of 2023 filed on May 17, Justice Hedwig Imbosa Ong'udi found Kecobo Executive Director Edward Sigei at fault for issuing the licences without the firm having a board in place.
For the past five years, Kecobo has been operating without a board of directors to whom most of the supervisory responsibilities are vested.
The judge accused Mr Sigei of circumventing the functions of the board as stipulated in the Copyright Act under which Kecobo was established.
According to Section 5 of the Act, the board's functions include: directing, coordinating and supervising the implementation of laws and international treaties and conventions to which Kenya is a party; licensing and supervising the activities of collective management organisations (CMOs); educating and informing the public on matters relating to copyright and related rights; administering and enforcing all matters relating to copyright and related rights in the country, among others.
“It’s plain from a reading of the law that the 1st respondent (Kecobo), in the conduct of its functions, one being licensing and supervising the activities of collective management societies under Section 5(b), requires a quorum of not less than seven members, including the chairman or the person presiding. It has been admitted in this matter that there is currently no Board of Directors following the expiry of its term that commenced on November 1, 2019,” Judge Ong’udi notes.
He adds, “Likewise, an examination of the certificates (licences) as annexed indicate that they were issued solely under the hand of the executive director (Mr Sigei) in violation of the required quorum of not less than seven. It is also apparent that there is no legal provision that grants the executive director the authority to make the Board's decision as advanced by the respondents and interested parties.”
The judge went on to refer to Section 11 (3) (c), which states that the executive director is responsible for the day-to-day management of the affairs of the board, subject to the directions of the board.
“In my understanding even in running of the Board’s affairs, the executive director is not to act out of his own but by the direction of the Board. It is therefore discernible from the reading of the law that the executive director in issuing the Certificates of Registration to the interested parties, did so unlawfully as this is the exclusive mandate of the Board of Directors. As such, I do not find it difficult to find that the executive director in the instant matter acted ultra vires contrary to the dictates of Section 5 (b) and Section 8 of the Copyright Act” the Judge added.
In his defence, Mr Sigei, supported by submissions from the CMOs, the Cabinet Secretary (CS) for Youth Affairs, Sports and the Arts (now Youth Affairs and Sports), the Clerk of the National Assembly and the Attorney General (AG), argued that he acted as he did because the Board was not properly constituted.
The CS, Clerk and AG were found by the court to have interfered in the affairs of Kecobo, resulting in the granting of licences to the three CMOs, PRISK, MCSK, KAMP, contrary to the dictates of the Copyright Act.
Mr Sigei argued that he had the authority to issue the licence certificates to the CMOs as the executive director who was charged with the day-to-day management of Kecobo's affairs on behalf of the Board.
After considering all aspects of the litigation, Justice Ong'udi came to his decision to quash the licences pending the establishment of a properly constituted board.
“An order of certiorari is hereby issued and directed at the executive director of the 1st respondent to quash the decision to award the certificates of renewal of registration of a Collective Management dated 5th May 2023 or any other date provided such certificates were not issued by the Board of Directors,” the judge said.
In the same breath, the judge also issued “An order of prohibition to issue prohibiting the 1st respondent (Kecobo) from processing or issuing a certificate of renewal of registration of a Collective Management Society to any of the interested parties (PRISK, MCSK, KAMP) or any other party without such decision being made by a legally constituted Board of Directors of the 1st respondent.”
Judge Ong’udi also reprimanded Mr Sigei and issued “a declaration that the 1st respondent does not have powers to issue provisional, interim or partial licences to the interested parties.”
Lastly, “A permanent injunction to issue restraining the 1st respondent from issuing any certificate of renewal of collective management [organisations] until such time as the 1st respondent shall be lawfully constituted under the Copyright Act.”
According to Section 6 of the Copyright Act, a lawfully constituted Kecobo Board shall consist of a chairperson appointed by the President, the Principal Secretary in the National Treasury or a designated representative, the Principal Secretary in charge of matters relating to culture and heritage or a representative.
The Principal Secretary in the Ministry is responsible for matters relating to information and communication technology or a designated representative, the Attorney-General or a representative, three persons nominated by each of the associations recognised by the government as representing stakeholders in the music, film and publishing industries, and the executive director.
The Board meets at least four times each financial year, with no more than four months elapsing between one meeting and the next.
The quorum for a Board meeting shall be seven members, including the chairman or the person presiding.
