A contract dispute between Safaricom, Kenya’s largest telecom operator, and longtime dealer Goodweek Inter-Services Limited has escalated into a high-profile legal battle at the High Court of Kenya. Goodweek, which has been selling M-PESA services, SIM cards, and Safaricom merchandise since 2002, is challenging its removal from Safaricom’s dealership network, alleging that the telecom giant used its dominant market position to impose unfair contract terms.
What Sparked the Dispute?
Goodweek lost access to Safaricom’s Online Dealer Trading Portal in April 2024 after it failed to renew its dealership contract. According to Safaricom, this was an automatic, procedural suspension triggered by the expiration of the dealership agreement.
“The Online Dealer Trading Portal’s automated shut-down response is a safeguard mechanism designed to ensure compliance with regulatory and contractual obligations,” Safaricom stated in court documents.
Safaricom maintains that:
✅ Over 400 other dealers successfully renewed their contracts without issue.
✅ Goodweek had ample notice to renew but chose not to sign a new agreement.
✅ The contract lapsed naturally rather than being terminated by Safaricom.
However, Goodweek strongly disputes this version of events, arguing that its removal was not routine but a result of Safaricom’s unfair contract practices.
Goodweek’s Claims Against Safaricom
READ ALSO: Safaricom Gets Green Light For Ziidi Money Market fund
Goodweek argues that Safaricom used its market power to force dealers into one-sided contracts with no room for negotiation. The company claims that:
🔹 It was locked out for refusing to accept contract terms it deemed unfair.
🔹 Safaricom operates as a dominant player in the telecom industry, leaving smaller dealers with little bargaining power.
🔹 The contract renewal process was not as straightforward as Safaricom claims.
The High-Stakes Legal Strategy
The lawsuit goes beyond Safaricom, as Goodweek has also named Vodafone Plc, Vodafone Kenya Limited, and Mobitelea Ventures Limited as co-respondents. This suggests that Goodweek views the dispute as part of a larger pattern involving major telecom players.
However, Safaricom’s lawyer, Daniel Ndaba, has questioned the relevance of Vodafone and Mobitelea’s inclusion in the case.
Key Legal Questions Before the High Court
The case now revolves around a crucial legal question:
Did Safaricom simply enforce standard contract terms, or did it use its dominant position to unfairly pressure smaller dealers?
Safaricom insists that contract law was followed, arguing that:
📌 Goodweek’s contract naturally expired due to non-renewal.
📌 The dispute should have gone to arbitration, as outlined in the original agreement.
📌 No special or unfair treatment was imposed on Goodweek.
However, Goodweek sees this case as a test of power dynamics in Kenya’s telecom industry. If the High Court rules in Goodweek’s favor, it could:
➡ Set a legal precedent for how large telecom firms engage with smaller dealers.
➡ Strengthen regulations around contract negotiations in the telecom sector.
➡ Force Safaricom and other telecom giants to revise their dealership agreements.
Potential Industry-Wide Impact
This case carries far-reaching implications for Kenya’s telecom landscape. A ruling in Safaricom’s favor could reinforce the status quo, reaffirming that dealers must comply with standardized contracts or risk losing their dealership status.
Conversely, a ruling for Goodweek could challenge Safaricom’s dominance, potentially:
🚀 Encouraging more dealer-friendly contracts in the industry.
⚖ Strengthening regulatory scrutiny on major telecom operators.
🔍 Raising competition law concerns around the power imbalance in dealer agreements.
What’s Next?
As the case proceeds in the Constitutional and Human Rights division of the High Court, both parties are expected to present strong arguments backed by contractual evidence. With arbitration clauses, competition law, and market dominance concerns all in play, this legal battle could shape the future of dealership contracts in Kenya’s telecom sector.
The verdict will not only determine Goodweek’s fate but could also reshape the relationship between telecom giants and their dealers across Kenya.
