Software developer and innovator Sam Wanjohi has lost a Sh1.1 billion lumpsum that he was set to receive as compensation over the alleged usage of his ideas in the development of two M-Pesa apps.
This is after the High Court nullified the compensation that had been given to Wanjohi and his tech company through an arbitration in November 2024.
The arbitration had agreed with Wanjohi who is the founder of Popote Innovations that Safaricom had dropped his firm from a partnership then proceeded to use ideas that Wanjohi and Popote had fronted to develop M-Pesa Super App and M-Pesa Business App.
The compensation given comprised of Sh39.2 million in award, Sh902.7 million in shared revenue for the contested M-Pesa apps, and Sh2.5 million in costs of the case.
Following the award, Safaricom had gone to the High Court seeking nullification, arguing that the award that had been given out was fictitious and an attempt by Wanjohi and Popote to benefit from something they had not invested in.
Safaricom claimed in court that it had never signed a partnership agreement with Popote in 2018 for the development of a mobile payment solution that was to be known as Popote Pay.
Apparently, during arbitration, Popote had claimed that Safaricom had agreed to share revenues from the partnership before walking out of the deal and developing M-Pesa Super App and M-Pesa Business App without compensation for the ideas.
The two apps were then launched by Safaricom in June 2021 while Popote claimed that it had delivered the customized Popote Pay Solution on May 8, 2018.
Popote had further complained that the two apps were similar to the Popote Pay project that Safaricom and Popote had initially partnered to develop and launch together.
The arbitrator ruled in favour of Popote after determining that the two Safaricom apps were similar to the Popote concept. The arbitrator then proceeded to issue the Sh1.1 billion compensation package in favour of Popote whose director is Wanjohi.
In the new High Court ruling that has nullified the hefty pay given by the arbitrator, the High Court declared that there had been no expert or factual evidence to confirm that the two Safaricom apps were similar to Popote Pay when the compensation was given by the arbitrator.
In addition, the court determined that the Sh1.1 billion award was issued based on speculative financial assumptions and an unsigned agreement.
“The [High Court] finds that the arbitrator’s award predicated on an unsigned and inoperative contract, and containing speculative damages unrelated to the evidence, offends the principles of contractual certainty, legality, and fairness, thereby conflicting with the public policy of Kenya,” the High Court ruled.
“The evidence before this court shows that the alleged partnership agreement was never executed by Safaricom. Nor is there any exchange of correspondence or other written instrument evidencing an intention by Safaricom to submit disputes to arbitration.”
Although Popote produced an email sent to Safaricom which contained a draft of an agreement between itself and Safaricom. However, Safaricom contested this, arguing that the partnership agreement was never finalized because Safaricom never signed the contract.
The High Court concurred with Safaricom, and ruled that the email was merely an acknowledgement receipt of the draft agreement but did not signify execution or assent.
The High Court went on to declare that execution of the agreement by both Popote and Safaricom was an express precondition to the agreement going into effect, which did not happen.
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