A contractual dispute between Safaricom, Kenya’s largest telecommunications provider, and its former dealer, Goodweek Inter-Services Limited, has escalated into a high-profile legal battle at the High Court of Kenya.
Goodweek, which has long been involved in selling M-PESA services, SIM cards, and Safaricom merchandise, is challenging its removal from Safaricom’s dealership network, accusing the telecom giant of leveraging its market dominance to impose unfair contract terms.
The case, which is currently being heard in the Constitutional and Human Rights Division of the High Court, extends beyond Safaricom, as Goodweek has also named Vodafone Plc, Vodafone Kenya Limited, and Mobitelea Ventures Limited as respondents, suggesting that it views the issue as a broader industry concern.
Goodweek had been a registered dealer on Safaricom’s trading platform since 2002. However, in April 2024, it lost access to the platform after failing to renew its contract. According to Safaricom, this was a procedural and automatic suspension triggered by the expiration of the dealership agreement. “The Online Dealer Trading Portal’s automated shut-down mechanism ensures compliance with regulatory and contractual obligations,” Safaricom stated in its court filings.
The telecom company maintains that all dealers operate under identical terms, with over 400 other dealers successfully renewing their agreements without any issues. Safaricom argues that Goodweek had enough time to renew its contract but chose not to, making its claims of unfair treatment baseless.
Goodweek strongly disagrees, arguing that its removal was neither procedural nor fair. The company claims that Safaricom exploited its dominant position in the telecom sector to pressure dealers into accepting contracts with no room for negotiation. It asserts that by refusing to sign these rigid terms, it was effectively forced out of the dealership network.
As part of its legal strategy, Goodweek has brought in Vodafone Plc, Vodafone Kenya Limited, and Mobitelea Ventures Limited, though Safaricom’s legal team, led by Daniel Ndaba, has questioned their relevance in the dispute.
At the heart of the legal battle is a critical question: Did Safaricom merely enforce standard contract terms, or did it use its market power to unfairly push out a smaller dealer?
Safaricom insists that it did not terminate Goodweek’s dealership agreement but that the contract simply lapsed because the company declined to renew it. The telco also argues that the dispute should have been resolved through arbitration, as outlined in the original contract, rather than escalating to a court battle. “The contract lapsed by effluxion of time as the parties were unable to renegotiate or extend its terms as they had in previous years,” Safaricom stated in its defense.
Goodweek, however, sees this case as more than just a business disagreement—it views it as a test case for the balance of power between major telecom firms and smaller dealers in Kenya. Should the High Court rule in its favor, the decision could set an important precedent for dealer agreements and business practices in the industry.
With key issues such as contract law, market dominance, and arbitration clauses all in play, the ruling in this case could have significant consequences for Kenya’s telecommunications sector, potentially reshaping how dominant firms engage with their smaller partners.
