Time flies with great content! Renew in to keep enjoying all our premium content.
Prime
Faulu loses bid to stop M-Shwari in row with Safaricom
CBA managing director Isaac Awuondo (left), former Finance minister Njeru Githae (centre) and Safaricom CEO Bob Collymore at the launch of M-Shwari in Nairobi last November. SALATON NJAU
Micro lender Faulu Kenya has lost its bid to stop Safaricom from offering the M-Shwari services pending the hearing and determination of legal dispute over the ownership of the savings and lending product.
Commercial Court Judge Jonathan Havelock on Monday dismissed the application by Faulu seeking to temporarily freeze M-Shwari on grounds that the microfinance institution had failed to sufficiently prove that it has copyright over the product.
Faulu Kenya in December accused the mobile service provider of copying its idea and asked the court to stop Safaricom from using M-Shwari — a saving and lending service that the mobile operator launched in partnership with Commercial Bank of Africa (CBA).
“The upshot of the foregoing is that the plaintiff has failed to establish a prima facie case that would result in this court granting the injunctive orders that it seeks,” ruled Mr Justice Havelock. Faulu said it is going to appeal the court ruling.
Safaricom has denied copying the concept from Faulu and reckons that the service of accessing credit through the mobile phone is not new, citing products unveiled by KCB Group, Family Bank and Equity Bank that run on M-Pesa platform.
Faulu claims that it was the author of M-Shwari idea, which it has now implemented with Airtel as Kopa Chapaa mobile loan services.
It also claims that it developed a cash advance service in 2011 and signed a non-disclosure agreement with Safaricom after sharing concept papers.
Documents filed in court by Safaricom showed that the mobile operator signed the agreement with Faulu Kenya on April 12 for a savings and lending service and with CBA on April 4.
But the judge ruled the product was already in the public domain and that its prior agreement with Airtel Networks Ltd had removed the secrecy of the product and ultimately makes it difficult for Safaricom to be in breach.
“Apart from its failure to prove its alleged copyright, I tend to agree with the defendant (Safaricom) that the latter has not breached the plaintiff’s confidence,” said Mr Justice Havelock.
He added that Faulu had also failed to show that it would suffer irreparable loss if Safaricom continues offering the services pending the hearing and determination of the case.
M-Shwari is a value addition service on the Safaricom’s money transfer service, M-Pesa. It allows users to save and borrow money (between Sh100 and Sh20,000) from CBA.
In December, Safaricom lost its bid to refer the dispute to the tribunal after High Court ruled that the microfinance institution had not registered its ‘concept paper’ as a patent and hence the tribunal had no powers to determine the row.
Faulu made the application for injunction following the ruling in December. It sought stop Safaricom from using the M-Shwari service saying it is a disputed product and its continued use would disadvantage it.
This is not the first time that Safaricom has been sued over the ownership of products and services.
Last week, a doctor moved to the High Court seeking to stop the mobile operator from offering medical consultations through video conferencing.
Dedan Warui accuses the mobile service provider of copying his idea and is asking the court to stop Safaricom from using Health Telepresence, a product launched in partnership with AAR Kenya, and to compel it to pay damages.
Christopher Ondieki took Safaricom to court in 2008 saying he invented M-Pesa’s upgraded technology that allows users to transfer money in US dollars and in shillings to and from bank accounts.
