https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11931

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **MILIMANI LAW COURTS** **COMMERCIAL AND TAX DIVISION** **COMM. CASE NO. E091 OF 2025** **BETWEEN** **PAULA ROGO(Suing on her own behalf and on** **behalf of M-Pesa account holders who have been** **victims of Fraud)......................................................................................PLAINTIFF** **AND** **SAFARICOM PLC……………..........................................................1ST DEFENDANT** **M-PESA HOLDING COMPANY LIMITED…………….………….2ND DEFENDANT** **AND** **CENTRAL BANK OF KENYA………………………….…….1ST INTERESTED PARTY** **COMMUNICATIONS AUTHORITY OF KENYA………...2ND INTERESTED PARTY** **CONSUMERS FEDERATION OF KENYA(COFEK)………3RD INTERESTED PARTY** **RULING** **Introduction and Background** 1. On 11th February 2025, the Plaintiff filed the present suit stating that she is suing on the Defendants on her own behalf and on behalf of all *M-Pesa* account holders who have been victims of fraud. She seeks declarations that the Defendants have violated hers and other victims' rights under **Articles 35, 46, and 47** of the ***Constitution***, orders against the Defendants to include fraud data and investigation statuses in their annual public reports and that they should within 180 days, implement adequate systems to prevent fraud, create dedicated reporting lines and teams, compensate victims fairly and promptly and pursue perpetrators while updating victims. She also seeks compensation for a sum of Kshs.125,658.00/- stolen from her phone, general damages for violation of consumer rights and constitutional rights, punitive damages, interest and costs of the suit. 2. In response to the suit, the 1st Interested Party (“CBK”) filed the Chamber Summons dated 20th May 2025 seeking its name to be struck out from this proceeding. The application is supported by grounds on its face and the supporting affidavit of its advocate, **George Brian Akello**, sworn on 20th May 2025. It is opposed by the Plaintiff through the Grounds of Opposition dated 4th July 2025. The 1st and 2nd Defendants have also filed the Notice of Preliminary Objection dated 5th June 2025 seeking to strike out the suit for lack of jurisdiction and for the Plaintiff’s failure to exhaust the statutory dispute resolution mechanism. 3. They contend that the dispute between the Plaintiff as a customer and the Defendants, being licensed telecommunications service providers, falls under the regulatory framework of the ***Kenya Information and Communications Act(Chapter 411A of the Laws of Kenya)*** and its regulations. That the Tribunal under the oversight of the 2nd Interested Party (CAK) can adequately resolve the dispute which falls squarely within its jurisdiction. As such, they aver that the suit is premature and irregular by coming to court without first exhausting the prescribed dispute resolution mechanism and that the Plaintiff's suit offends the doctrine of exhaustion of alternative dispute resolution mechanisms. 4. CAK has also filed an application dated 4th July 2025 seeking to be struck out from these proceedings. The applications and Objection have been canvassed by way of written submissions which I have considered together with the pleadings and I will make relevant references to them in my analysis and determination below. **Analysis and Determination** 1. I propose to first deal with the Objection by the Defendants challenging the court’s jurisdiction to deal with this matter. Indeed, where a dispute resolution mechanism exists outside the court, the mechanism should be first exhausted before the court’s jurisdiction is invoked (see the Court of Appeal decision in **Geoffrey Muthinja & another v Samuel Muguna Henry & 1756 others [2015] KECA 304 (KLR)**]. This is consistent with **Article 159** of the Constitution which enjoins the court to promote alternative dispute resolution mechanisms and where possible the court ought to give it full effect. 2. The Defendants rely on **Regulation 4(1)** of the ***Kenya Information and Communications (Dispute Resolution) Regulations*** which provide that *“a party to a dispute may, within sixty days of the occurrence of a dispute, notify the Commission and any adverse party of the dispute, in writing…’*. As submitted by the Plaintiff, the Court of Appeal, in **Kenya Wildlife Service v Joseph Musyoki Kalonzo [2017] KECA 234 (KLR)** held that that the use of "may" in such provisions does not oust this court's jurisdiction. However, the Defendants aver that **Regulation 3(a)** provides that *“The Commission shall have power to resolve disputes between—(a) a consumer and a service provider;….”* which connotes a mandatory procedure. The Plaintiff then countered by stating that she is also seeking declarations that her rights under **Articles 35, 46 and 47** have been violated and that these are constitutional rights and under **Article 165(2)(b),** this court has jurisdiction to determine such questions. She also relies on the Court of Appeal decision in **Nairobi Bottlers Limited v Ndung’u & Another (Civil Appeal 99 of 2018) [2023] KECA 839 (KLR)** which held that a statutory committee cannot determine constitutional matters and that mandate is reserved for this court. 3. Going through the rival arguments and authorities, I find that the Plaintiff has a stronger jurisdictional and contextual argument. **Regulation 4(1)** uses "may" for the initiation of the dispute process which makes this process optional and if Parliament intended to make the process mandatory, it would have used the word “shall”. The absence of an express ouster clause in the ***Regulations*** is also significant meaning this court still retains jurisdiction to hear and determine such disputes. 4. In any event, the most compelling argument is that the Plaintiff's claim is not merely a consumer complaint but a constitutional challenge alleging systemic violations of rights by an allegedly dominant market player and this is an example of matter that this the court should hear and determine. Furthermore, CAK’s application to be struck out states that it “…*is accordingly restricted to consumers of communication services provided by the 1st Defendant and not financial services provided by the 2nd Defendant, which falls squarely under the 1st Interested Party."* This is a significant admission because the Defendants are arguing that the Plaintiff should have gone to the CAK, but the CAK itself says it has no mandate over the financial services aspect of *M-Pesa* which undermines the Defendants' argument. If the CAK itself says it cannot resolve the dispute, it would be unjust to force the Plaintiff to exhaust a remedy that is effectively unavailable. 1. The Defendants also rely on Clause 15.3 and 15.4 of the *M-Pesa Terms and Conditions*, which state that disputes may be referred to CBK. The Plaintiff submits that she followed the ***National Payment Systems Regulations*** by filing her complaint with Safaricom and receiving no response and then proceeded to court. In my view, CBK’s mechanism is a contractual clause and not a statutory mandatory precondition. Since the Plaintiff's complaint under the ***National Payment Systems Regulations*** was filed and the Defendants failed to respond, she was entitled to seek further recourse before the court. 2. As such, I find that the Defendants' Preliminary Objection cannot succeed. The Plaintiff has raised genuine constitutional issues that fall within this Court's jurisdiction under **Article 165(2)(b)** of the Constitution and the ***Kenya Information and Communications Act’s*** dispute resolution mechanism is not mandatory and in any event, the CAK itself admits it lacks mandate over part of the dispute. The Plaintiff exhausted the available mechanism under the ***National Payment Systems Regulations*** by filing her complaint with the Defendants receiving no response. In the foregoing, the Defendants’ Objection is dismissed. 1. Turning to the applications by CAK and CBK to be struck out from this proceedings, **Order 1 Rule 10(2)** of the ***Civil Procedure Rules*** provides as follows: ***The court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the court to be just, order that the name of any party improperly joined, whether as plaintiff or defendant, be struck out, and that the name of any person who ought to have been joined, whether as plaintiff or defendant, or whose presence before the court may be necessary*** ***in order to enable the court effectually******and completely to adjudicate upon and settle all questions involved in the suit, be added****.* 1. From the above, the court has power at any stage of proceedings, to strike out a party who has been improperly joined in the suit and to add necessary parties, so as to enable the court effectually and completely adjudicate all questions involved in the suit. The purpose of the power was explained in **Diamond Trust Bank Kenya Limited v Richard Mwangi Kamotho & 2 others [2017] KEHC 4674 (KLR)** where the Court held that an improperly joined party should not be forced to undergo a full trial merely to vindicate itself. 2. I have gone through the pleadings and the submissions. It is not in dispute that CBK is the regulator of payment service providers under the ***National Payment Systems Act*** and it licensed and supervises Safaricom as a payment service provider. The Plaintiff seeks structural reliefs requiring the Defendants to implement new systems to prevent fraud, compensate victims, and investigate perpetrators. These reliefs fall squarely within the CBK's supervisory mandate. If judgment is entered in the Plaintiff's favour, the CBK would be required to exercise its supervisory powers to ensure the Defendants comply with the court's orders. Without the CBK, enforcement may be difficult and I find that CBK has not demonstrated any prejudice it would suffer if it remains as an Interested Party considering its role is to offer guidance and support to the court. CBK is not a party against whom a decree is sought, but its presence enables the court to completely and effectively adjudicate the dispute which is the definition of a "proper party". I therefore find that CBK has not made out a case to be struck out from these proceedings. 3. In respect of CAK, its mandate under the ***Kenya Information and Communications Act*** is to license and regulate telecommunication services and it has not been disputed that it does not regulate financial services. The Plaint does not allege any wrongdoing by CAK as it is not mentioned anywhere in the body of the Plaint except for the descriptive paragraph and no negligence or breach of duty is attributed to it. All the prayers in the Plaint are directed against the Defendants and no relief is sought against the CAK and I find that the court can pass an effective decree in CAK's absence and CAK is not bound by the outcome and its presence is not required to settle the questions in dispute. Forcing CAK to remain in the suit would cause unnecessary expense and prejudice as it would be required to defend a suit in which no cause of action is disclosed against it. I therefore find that CAK has made out a case to be struck out from these proceedings. **Conclusion and Disposition** 1. For the above reasons, I now make the following dispositive orders: 2. **The 1st Interested Party’s (CBK) Chamber Summons dated 20th May 2025 is dismissed with costs to the Plaintiff.** 3. **The 2nd Interested Party's (CAK) Notice of Motion dated 4th July 2025 is allowed and the name of the Communications Authority of Kenya is hereby struck out from the proceedings.** 4. **The Plaintiff shall bear the costs of the CAK's application.** **DATED SIGNED and DELIVERED virtually at NAIROBI this 22nd DAY of JULY 2026** **............................................................................** **J.W.W. MONGARE** **JUDGE** **IN THE PRESENCE OF** 1. M. Shah holding brief for Mr. Njoroge and Ms. Mwai for the Plaintiff/Applicant. 2. Ms. Impano for the Defendant/Respondent. 3. Mr. Akello for the 1st interested Party. 4. N/A for the 2nd Interested Party. 5. Godfrey/Amos - Court Assistant