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Firm loses Sh10m ‘non-compete’ claim against manager hired by rival
The court noted Lipa Later presented no evidence of financial harm, lost clients, or diverted business. There was also no proof that Wanini had poached employees or shared confidential information.
Consumer credit provider Lipa Later Limited has lost its bid in court to recover Sh10 million damages from its former senior manager Caroline Wanini who joined rival fintech firm Craft Silicon immediately after resigning —violating a 12-month non-compete clause.
The Employment and Labour Relations Court ruled that even though Ms Wanini breached her post-employment restrictions by taking the new role without written consent, Lipa Later did not prove any financial loss resulting from her actions.
Ms Wanini, formerly Lipa Later’s Kenya Head of Partner Success Manager, resigned in July 2023 and joined Craft Silicon Kenya as Head of Product the following month.
Her two-year contract with Lipa Later commenced on August 1, 2022, and was set to expire on July 31, 2024. However, she resigned on July 1, 2023, serving her notice period until her employment officially ended on July 31, 2023.
She began her new role at Craft Silicon Kenya the very next day —August 1, 2023.
Both companies operate in Kenya’s fintech sector, focusing on digital payments and credit markets under the buy now, pay later business model. Lipa Later was placed under administration in March 2025 due to financial distress featuring liquidity issues and loan defaults.
The firm sued Ms Wanini seeking a court declaration that she breached confidentiality and non-compete clauses in her 2022 contract.
The company argued that she had agreed not to work for a competitor for 12 months post-termination without written consent and had also pledged not to solicit Lipa Later’s clients or engage in competing services.
The firm requested injunctions to prevent Ms Wanini from working for a competitor, approaching clients or employees, or disclosing confidential information, alongside Sh10 million in damages.
Court records revealed Wanini earned a monthly gross salary of Sh420,000 during her tenure at Lipa Later.
Around the time she left Lipa Later Limited and joined Craft Silicon, the latter company launched its own buy now, pay later product.
The court acknowledged Wanini breached Clauses 14.1 and 14.2 of her contract by joining a competitor within the restricted period.
"The respondent breached Clause 14. 1 and 14.2 of the contract of employment dated July 29, 2022 by taking up employment in a competing business (Craft Silicon) within 12 months of termination of her employment with the Claimant without first seeking and obtaining written consent from the Claimant. I so declare," the judge stated.
Under cross-examination, Wanini admitted Craft Silicon’s BNPL business resembled Lipa Later’s but argued that her former employer did not own the concept.
She also admitted having been in contact with Lipa Later's customers and partners (merchants) during her employment in the claimant company.
Additionally, she acknowledged having been privy to Lipa Later's critical business information and technology used by the company as part of her managerial role.
However, the court ruled that mere breach of contract was insufficient grounds for damages or injunctive relief.
The court noted Lipa Later presented no evidence of financial harm, lost clients, or diverted business. There was also no proof that Wanini had poached employees or shared confidential information.
Additionally, the court declined to issue an injunction, observing that more than two and a half years had passed since Wanini’s resignation —far exceeding the 12-month restriction period.
Regarding damages, the court emphasised that general damages are not awarded for contract breaches unless specific losses are proven.
“As a general rule, there can be no damages for breach of contract,” the judgment stated, adding that compensation applies only where pecuniary loss is demonstrated.
Ultimately, the court only upheld Lipa Later’s claim that Wanini breached the non-compete clause and dismissed all other requests.
