Row over M-Shwari now takes new twist

What you need to know:

  • Safaricom wants battle with Faulu settled by a tribunal, saying courts can only handle appeal

Safaricom wants a tribunal to determine claims that it stole the M-Shwari idea from Faulu Kenya.

The mobile telephone company launched M-Shwari in November as a savings and loans service in partnership with the Commercial Bank of Africa (CBA).

Faulu Kenya, a financial institution, sued Safaricom accusing it of copyright infringement and breach of agreement.

Safaricom is now seeking to have the dispute transferred from court to the Industrial Property Tribunal. (Read: Safaricom denies theft of M-Shwari concept)

“The proper forum for the determination of the issues arising from this suit is the Industrial Property Tribunal,” Safaricom’s lawyer Brian Muthiora has stated in a reply filed in court.

Mr Muthiora contends that the High Court lacks jurisdiction over the matter and can only handle an appeal arising from the tribunal.

The deposit-taking micro-finance institution has asked the court to temporarily stop Safaricom from offering the service as it pursues a permanent injunction against the mobile operator in court.

An injunction will adversely affect 640,000 to use M-Shwari, while CBA would suffer loss on Sh50 million of depositors’ funds that it has loaned out, according to Safaricom.

About Sh150 million have been collected as deposits in M-Shwari, the mobile phone firm stated. (Read: )

CBK’s nod

“M-Shwari is a product of CBA and is authorised as such by the Central Bank of Kenya,” Safaricom has stated in its court filings.

Faulu has claimed that the service was its idea which it allegedly shared with Safaricom for possible collaboration.

It says that it has already implemented it with Airtel Kenya as Kopa Chapaa mobile loan services.

But according to Safaricom, the financial institution cannot claim to have developed a novel cash advance system prior to Safaricom’s systems.