Multinationals battling court cases in KenyaTuesday January 03 2023
Several multinationals are battling court cases in Kenya whose outcome is highly awaited this year because of the risks they carry on their operations.
The corporations facing the cases include major grower, processor and supplier of Kenyan tea James Finlay, social media giant Meta, and Lancet, which has been sued by its former chief executive Ahmed Kalebi.
Meta faces two cases filed before the High Court one by two Ethiopians, and another by a South Africa who alleges a toxic work environment working as a content moderator.
The Ethiopians are seeking more than Sh250 billion in compensation for victims of hate and violence allegedly fuelled by the social media giant.
Fisseha Tekle and Abrham Maereg accuse Meta Platforms Inc of fuelling violence in East Africa by failing to moderate messages they deem as inciting.
Maereg says his father — Prof Maereg Amare Abrha was killed in November 2021 amid the war between the Ethiopian government and the Tigray People’s Liberation Front (TPLF). He says the post on Facebook profiled and accused him of associating with TPLF.
READ: Nairobi the warfront for Sh250 billion Facebook suit
Mr Tekle, a legal adviser at Amnesty International says human rights groups cannot protect people’s rights if the social media people rely on for news and connection fuels hate and disinformation.
Through lawyer Mercy Mutemi, the two want the High Court to compel Meta to create a restitution fund of Sh200 billion for victims of hate and violence linked to Facebook.
“Upon the finding of liability as prayed in above, an order establishing the Facebook Advertisements Victims Fund in Kenya to be administered by this honourable court or its nominee and to which the respondent shall be required to deposit Sh50 billion for the benefit of any Facebook user in Kenya who has been shown a boosted or sponsored post containing content that constitutes inciteful, hateful and dangerous speech,” the petition states.
The second suit against Meta was filed by a South African man, Daniel Motaung accusing the social media giant of exploitation and poor working conditions at its Nairobi office.
Mr Motaung is seeking compensation, arguing Meta subjected him and his colleagues to psychological injuries arising from repeated exposure to extremely disturbing, graphic violent content coupled with a toxic working environment.
He was employed as a moderator by Meta’s local outsourcing company — Samasource Kenya EPZ ltd. He wants to be paid damages for the suffering he underwent in the six months he worked for the firm.
A ruling on whether the case can proceed after Meta challenged the jurisdiction of the High Court to determine the matter will be made in February.
Dr Kalebi moved to court last year seeking Sh3.6 billion from the laboratory services. He is accusing his former French and South African partners of shortchanging him.
The Kenyan helped found the firm in 2009 and retired in 2021. He has sued French firm Cebra Healthcare and Lancet Service Company of South Africa, demanding his payout as a founder of the Kenyan wing of the laboratory firm, which returned a profit of Sh306 million in 2020 on sales of Sh1.6 billion.
He says the majority shareholders sidelined him from Lancet operations, including the hiring of executives while diluting his ownership from 20 per cent to 10 per cent.
In 2019, France-based multinational Cerba Healthcare bought shares in South Africa’s Lancet Laboratories for an undisclosed amount in a deal that saw it take control of the East African unit headed by Dr Kalebi.
Lancet SA holds a 49 per cent stake in the joint venture while Cerba Healthcare has 51 per cent. The joint venture, however, did not include operations in South Africa.
More than 1,000 current and former tea pickers sued the company in 2019 demanding compensation in cases pending in Scotland courts.
The company, however, filed another case before the Employment and Labour Relations Court in Kenya, to block the cases in Edinburgh.
The multinational argues that the Kenyan courts can handle the case and for that matter, the cases in Scotland should be discontinued.
Justice James Rika agreed to hear the case despite objections from the former workers.
The former employees argue that they were subjected to poor working conditions, including working for 12 hours a day — six days a week and carrying heavy baskets on their backs after picking the tea leaves.
The former employees argue that the baskets weighed up to 30kg.
According to James Finlay, the decision of the workers to institute the proceedings before the Scottish Court of Sessions, alleging violation of their rights, is an affront to the constitution and the sovereignty of Kenya.
The company with Scottish roots wants the court to issue a declaration that the Director of Occupational Health and Safety Services in Kenya is the one to deal with work injury claims arising within the country in line with Article 159 of the Constitution and Section 16 of the Work Injury Benefits Act.
READ: Ex-Lancet CEO demands Sh3.5bn amid board row
The company wants the court to issue a permanent injunction barring the former and current workers or their agents from proceeding with the cases in Scotland.
The workers on their part argue that the petition is part of the wider plan by the company to frustrate their case in Scotland.
Nokia Corporation and its top executives are also facing charges brought by a Kenyan firm Technoservice ltd accusing the global telecoms firm of illegally obtaining tax information of a Kenyan company for use before an international arbitration court.
A Milimani court had summoned Nokia bosses to appear in court virtually and plead to several charges but the case was stopped after it moved to the High Court.
The Kenyan firm has been pressing to have Nokia bosses charged over information the global company filed before an arbitration court.
The company through its director, Bulent Gulabahar- lodged a complaint with the DCI and the DPP, accusing Nokia of using false information in a case that was pending before the ICC Court of Arbitration pitting the two firms. The arbitration matter was later withdrawn according to court documents.
Among the charges Technoservice ltd wants officials of the Finish Company to face charges including conspiracy to fabricate evidence, conspiracy to defeat justice, making a false document and uttering a false document.
The company has separately sued Nokia seeking more than Sh150 million for breach of contract.
In a case filed before the High Court, Technoservice Ltd alleges that Nokia breached the deal when it sold its business to Microsoft Corporation in April 2014.
The company further seeks damages and loss of earnings after a number of Nokia Service Centers, which it allegedly established jointly, were taken over by Microsoft.
More than 15 companies under Kenya Tea Growers Association and East African Tea Trade Association moved to court last year to challenge sections of the Tea Act arguing that they are unconstitutional.
Among the sections targeted by the EATTA is section 34(4), which it said is silent on the percentage of payments to be borne by the tea buyers and tea factories to pay the brokerage commission.
The sections cap the brokerage fees but fail to indicate how the fees will be paid, according to EATTA.
The association wants the court to interpret and determine whether sections 5(l), 32(3)(b), 32(4), 34(3)(b), 34(4)(5)(6), 36(1),48 (1) and 53 of the Tea Act is constitutional.
The enactment of Section 53 of the Act on the provision of tea levy, the association adds, shall be ultimately borne by the farmer or producer of tea.
The law, which came into effect on January 11, 2021, says all teas should be offered on the tea auction floor.
The tea estates argue the sections challenged will have a negative effect on other tea players, particularly large-scale plantations, which have existing contracts for direct sales with overseas buyers.