BY SAM ALFAN.
Three Safaricom subscribers who have sued the company over transfer pricing have opposed an application by the telco to move the case to arbitration.
Gichuki Waigwa, Lucy Nzola and Godfrey Okutoyi want the application by Safaricom PLc, M-Pesa Holding Company limited and Vodafone Group dismissed arguing that the matter should be handled by the High Court.
The three M-Pesa account holders took on the giant telco accusing the company of among others, transfer pricing by unlawfully removing money belonging to M-Pesa account holders from Kenyan and shifting it to low tax jurisdictions.
“It is therefore just and equitable that the Vodafone Group’s application be dismissed with costs, and that this Court confirms that the service effected upon it was factually and legally valid to all intents and purposes,” the three subscribers said.
Safaricom applied for the suspension of the case and has urged the court to refer the matter to arbitration.
But Waigwa said the Arbitration Act cannot be invoked whatsoever in the current dispute, for various reasons including the fact that there is no agreement between them and the company.
Through lawyer Wilfred Nderitu, the accountholders argue that there never was and there has never been any agreement between M-Pesa account holders and M-Pesa Holding, and no evidence of any such agreement has been produced.
“There could never have been any legal relationship between M-Pesa Accountholders and M-Pesa Holding given that as at 23 February 2007 the Self- Declaration of the sham Trust was made by M-Pesa Holding, the M-Pesa Service was not even in existence. Additionally, there could not have been any Trust property (i.e., M-Pesa Accountholders’ funds) vested in M-Pesa Holding as at that date, as there was no M-Pesa service and, by extension, no M-Pesa Accountholders at the time. The M- Pesa service came into existence on 6 March 2007,” says lawyer Nderitu.
Waigwa said M-Pesa accountholders were not a party to the sham Self-Declaration of Trust dated 23 February 2007.
“It is therefore just and equitable that the Vodafone Group’s Application be dismissed with costs, and that this Honourable Court confirms that the service effected upon it was factually and legally valid to all intents and purposes,” Waigwa said.
He dismissed M-Pesa Holding claims that the suit is in breach of Article 159 of the Constitution. Saying that on the contrary, it is M-Pesa Holding’s application that is in breach of the Constitution.
He added that the so-called arbitration agreement is contained in sham Trusts and cannot therefore found any referral to arbitration as the court cannot give effect to sham Trusts and even if it were to be assumed that there was an arbitration agreement capable of being invoked (although I reiterate that such an agreement does not exist), it would be inappropriate to refer the dispute to arbitration as the public interest element in the dispute demands that the dispute be resolved and decided “in a fair and public hearing before a court”, as contemplated by Article 50(1) of the Constitution;
Waigwa reiterated that the suit raises issues of constitutional importance, which require the court to exercise its jurisdiction under Article 165(3)(b), (d)(i) and (ii) of the Constitution, and an Arbitrator would not be clothed with any such jurisdiction;
“Given that the legal position is that the Award of an Arbitrator is generally final, there would be a serious risk that the Plaintiffs would lose their constitutional right to prefer an Appeal to the Court of Appeal pursuant to Article 164(3)(a), and ultimately to the Supreme Court under Article 163(4)(a) and (b) of the Constitution,” he argues.
He said the three subscribers risk losing the opportunity to have this suit heard by a panel of Judges despite raising substantial questions of law as already alluded to by M-Pesa Holding.
