Kenya's largest telecom operator, Safaricom, is embroiled in a legal battle with Goodweek Inter-Services Limited, a longtime dealer of M-PESA services, SIM cards, and Safaricom merchandise. The dispute, which has escalated to the Constitutional and Human Rights division of the High Court of Kenya, centers around Goodweek's removal from Safaricom's dealership network and allegations of unfair contract terms and market dominance abuse.

Goodweek had been trading on Safaricom's dealer portal since 2002 but lost access in April 2024 after failing to renew its contract. Safaricom argues that the suspension was automatic and procedural, triggered by the expiration of the dealership agreement. The company claims that all dealers operate under similar terms, and over 400 other dealers renewed their agreements without issue.

However, Goodweek contends that its removal was not routine and that Safaricom used its dominant market position to force dealers into signing contracts with no room for negotiation. Goodweek argues that it was effectively locked out by refusing to accept these terms. The dealer's legal strategy includes bringing Vodafone Plc, Vodafone Kenya Limited, and Mobitelea Ventures Limited into the case, although Safaricom's lawyer, Daniel Ndaba, has questioned the relevance of their inclusion.

At the heart of the case is a key legal question: Did Safaricom simply enforce standard contract terms, or did it use its market power to strong-arm smaller players? The outcome of this case could have far-reaching implications for the industry, particularly with regards to arbitration clauses, market dominance concerns, and contract law.

Goodweek sees this as a test case for the power dynamics between large telecom firms and their smaller partners. If the High Court rules in its favor, the case could set a precedent for how dominant firms engage with dealers in Kenya's telecom sector. The legal battle is being closely watched, as it may have significant consequences for the industry's business practices and relationships between telecom operators and their dealers.

Safaricom maintains that it did not terminate Goodweek's contract; rather, the agreement expired naturally due to Goodweek's refusal to sign a new deal. The telco also argues that the dispute should have gone to arbitration, as stipulated in the contract, rather than court. However, Goodweek's legal team is pushing for a court ruling, which could provide a clearer precedent for future disputes.

The case highlights the complexities of contract law and the challenges faced by smaller dealers in negotiating with dominant market players. As the legal battle unfolds, it remains to be seen how the High Court will rule and what implications this will have for Kenya's telecom sector.