Kenya (Commonwealth) _ If claims of violation of contract with payment service provider Pesapal are found to be genuine, Airtel Networks Kenya Limited might face a Sh10 million punishment.
Airtel and Pesapal Limited, Mawingu Airtime Limited, Interintel Technologies Limited, and Okazaki Limited (Interested Parties (IPs)) agreed into distributorship agreements on various dates ranging from December 5, 2012, to July 2019. Airtel’s products were to be sold and distributed by the interested parties.
The agreement included a dispute resolution clause that required issues between the parties to be addressed through arbitration.
Airtel Networks Kenya Limited is on the verge of a Sh10 million punishment after a court dispute that has captivated the telecom industry. The alleged violation of contract with payment service provider Pesapal has sparked a court battle, with the case set to be heard before Justice John Chigiti on February 14, 2024.
Documents submitted before the Milimani Law Courts reveal the complexities of the issue. Airtel, Pesapal Limited, Mawingu Airtime Limited, Interintel Technologies Limited, and Okazaki Limited engaged into distributorship agreements from December 5, 2012 until July 2019. The Interested Parties (IPs) were tasked with selling and distributing Airtel’s products under these agreements.
These agreements had a dispute resolution clause that required any disagreements between the parties to be resolved through arbitration. However, the plot twists in September and October 2023, when Airtel gets news of an inquiry from the Communication Authority (CA).
The CA’s notifications disclose continuing investigations into IP complaints alleging abuse of buyer power. If proven accurate, the penalties for Airtel may be harsh, ranging from a minimum punishment of Sh10 million to 10% of the previous year’s total revenue.
However, Airtel raises a fair point, claiming that it is unable to respond to concerns without access to their specifics. In response to the CA’s December 6 deadline for answers, Airtel claims that not having access to individual complaints limits its ability to develop a thorough and comprehensive response.
According to Airtel, the investigations and any fines expected to be imposed by the CA need that the CA provide us with the individual complaints in order for us to prepare a thorough and complete response.
The telecom behemoth claims that continuing investigations and enforcing penalties without access to the complaints will result in the CA acting as investigator, judge, and jury. Airtel seeks judicial intervention, requesting that the current investigations and processes relating to the allegations be halted.
As the legal drama unfolds, all eyes are on the forthcoming court session on February 14, 2024, before Justice John Chigiti. The conclusion of this lawsuit might have an influence not just on Airtel’s financial condition, but also on how contractual issues in the telecoms sector are handled. Stay tuned as the legal drama unfolds in the heart of Kenya’s court system.
Airtel Africa is a significant supplier of telecommunications and mobile money services in 14 African nations, particularly in East Africa as well as Central and West Africa. Airtel Africa provides its users with a comprehensive suite of telecommunications products, including mobile phone and internet services, as well as mobile money services both nationally and internationally. Through shortened client journeys, the Group intends to continue offering a straightforward and intuitive customer experience.
Airtel Kenya commenced operations in November 2010 following Bharti Airtel’s acquisition of Zain in June of that year. Airtel Kenya’s network serves around 86% of the population, with ongoing attempts to expand coverage across the nation. Since 2010, it has worked to reduce communication costs by bringing value-for-money goods and services, hence providing the necessary competition in the Kenyan telecoms industry.
