Companies

Airtel fights jail push in SportPesa dispute

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Sportpesa CEO Ronald Karauri. FILE PHOTO | NMG

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Summary

  • Executives of telecoms company Airtel have launched a fight against contempt of court charges which put them at risk of fines or jail terms.
  • The mobile operator is seeking protection against a contempt suit filed by the betting firm which has accused it of failing to unblock gaming pay bill accounts and short codes used by its partner Milestones Games Limited.

Executives of telecoms company Airtel have launched a fight against contempt of court charges which put them at risk of fines or jail terms after the mobile operator was sucked into a dispute between the State and betting firm, SportPesa.

The mobile operator is seeking protection against a contempt suit filed by the betting firm which has accused it of failing to unblock gaming pay bill accounts and short codes used by its partner Milestones Games Limited despite a court order to do so.

The dispute kicked off last year after the State-run Betting Control and Licensing Board (BCLB) stopped Milestone from operating under the popular Sportpesa gaming brand, saying the trade name had been appropriated from its rightful owner Pevans East Africa Limited.

The regulator also prohibited Milstones from using the short codes 29050 and 79079, pay bill numbers 521521, 9555700 and 955700.

Milestone challenged the decision and on December 3, 2020 obtained a court order allowing it to continue operating.

BCLB officials and Airtel, however, refused to reactivate the short codes and paybill numbers—prompting the betting firm to return to court to press for contempt charges.

Airtel in its defence, however, said as a regulated entity it had an obligation to comply with directives of the regulator, unless served with a court order suspending the directive.

Airtel’s legal manager, Lillian Mugo, revealed that on November 3, 2020, the Communications Authority of Kenya (CA) and the BCLB wrote to the mobile phone operator, directing it to terminate the short codes/USSD codes and pay bill numbers issued to Pevans due to compliance issues pending conclusion of investigations.

The mobile operator said the deactivated short codes and paybill numbers were issued to Pevans and could not be transferred to Milestone.

“That in compliance with the said directive, Airtel did suspend all its services as offered to Pevans Ltd which included the contracts, short codes/USSD codes and paybill numbers in favour of Pevans Ltd, which suspension still stands to date,” Ms Mugo said.

The CA, she said, also told Airtel to desist from reactivating the short codes and the paybill numbers earlier assigned to Pevans, until advised to do so.

Milestone moved to court seeking to have BCLB chairman Cyrus Maina and six other board members jailed for contempt of court. The betting company also wanted Airtel, Safaricom #ticker:SCOM and CA officials jailed for contempt.

“To preserve the dignity of court and inviolability of the judicial process it is imperative that this application be heard forthwith and in particular the errant Respondent and its board members be penalised for contempt of court,” the company said through its lawyer Willis Otieno.

Ms Mugo said Airtel entered into two contracts with Pevans to facilitate disbursement of Pevans’ payment to third parties using Airtel’s money transfer service.

Pursuant to the contracts, Airtel allowed and issued various short-codes/USSD codes and pay bill numbers assigned in favour of Pevans to be used on its platforms.

Ms Mugo argued Milestone had not demonstrated that Airtel violated its rights as alleged and the contractual relationships.

Milestone, she said, had never approached Airtel for a partnership with regards to Airtel’s money services or issuance of short-codes or pay bill numbers.

“That Airtel will suffer irreparable loss and prejudice if the orders prayed against it in the application are granted as currently (as the matter stand) there is no relationship whatsoever (contractual or otherwise) between itself and Milestone,” Ms Mugo said.

Under the terms of the contract, she argued, neither Airtel nor Pevans would transfer or assign any of its rights without express consent of the other. She added any assignment to Milestone without Airtel’s express consent was therefore void.

Mr Maina, the BCLB chairman, said Milestone moved to court to challenge a letter that had already been overtaken by events because the genesis of the complaint has since been withdrawn.

He said Milestone was given a fair hearing before its bookmaker’s licence was cancelled and that there was nothing barring the firm from making a fresh application.

“Due process was strictly followed to that effect and it was indeed given a fair opportunity to show cause in writing and also accorded a fair hearing where it was even represented by an advocate,” Mr Maina said.

BCLB wrote a letter to Milestone on December 4, a day after High Court judge Pauline Nyamweya barred the regulator from taking any further action against the company, directing it to show cause why its bookmaker’s licence should not be cancelled.

The case will be heard on April 19.