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Safaricom can now suspend Lipisha Consortium and Bitpesa Ltd services
Safaricom was on Tuesday given the nod to suspend two firms that offer payment platform for businesses by collecting, processing and integrating payments from customers and clients using mobile money.
Justice Joseph Onguto on Tuesday ruled that Safaricom was justified to suspend the services of Lipisha Consortium Ltd and Bitpesa Ltd, after a legitimate concern over how the two were conducting their businesses.
“A reading of the Commercial Agreement between Lipisha Consortium and Safaricom reveals that Safaricom could suspend, not terminate, the services even without notice and for any valid reason,” said Justice Onguto.
Lipisha Consortium, which provides mobile payment automation services to various third parties through its Lipisha Enterprise, operated through telecom firms, had entered into a deal with Safaricom in 2011.
The beneficiaries of the firm’s services were several third parties including Bitpesa Ltd.
SUSPENDED SERVICES
Safaricom had, on November 12, this year, suspended its services to Lipisha Consortium, saying that Bitpesa, dealt in bitcoin and wanted the latter to obtain approval from the Central Bank of Kenya before the services could resume.
Bitcoin is a digital currency that is created and held electronically, unlike the ordinary legal tender, and is not a government-backed unit.
The CBK had also made it clear that so long as Bitpesa Ltd dealt in bitcoin, it could not use the words “money remittance” or “money transfer”.
REGULATE CURRENCIES
The CBK, through a letter, also stated to the parties that it does not regulate virtual currencies.
“It would appear to me that Safaricom was justified in ensuring that its own licence was not ultimately questioned or put in jeopardy for so long as the CBK had failed or neglected to put its (Safaricom) fears to rest,” ruled judge Onguto.
The judge, while dismissing the application the two firms had filed against Safaricom, added that the dispute will best be resolved through arbitration.
SOURCE:THE NATION
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