Software Developer Who Accused Safaricom of Stealing His Work Loses Sh930 Million Claim After Court Says Missing Signature and Speculation Sank the Case

Safaricom has delivered a crushing legal blow to Popote Innovations and its founder Samuel Gathungu Wanjohi after the High Court in Nairobi set aside a multimillion-shilling arbitral award that had originally ordered the telco to pay roughly Sh930 million to the software firm.

Justice Peter Mulwa found the award was founded on an unsigned, inoperative agreement and speculative calculations of loss that could not survive public policy scrutiny.

The decision, which quashes the Final Arbitral Award dated November 29, 2024 issued by Mr Paul Ngothi, HSC, FCIArb, effectively extinguishes an earlier ruling that had granted Popote Sh39.2 million for development costs and roughly Sh902.7 million as projected shared revenue, plus costs.

The High Court concluded that the tribunal had exceeded its jurisdiction by treating a draft or unsigned document as a binding contract.

Popote had argued that the parties concluded a Partnership Agreement in April 2018, that Safaricom confirmed the deal by email on May 3, 2018 and that Popote delivered a customised Popote Pay Solution on May 8, 2018.

The firm said Safaricom abandoned the launch, later rolled out the M-Pesa Super App and M-Pesa Business App incorporating the same features, and therefore owed revenue share under the partnership.

Safaricom responded that the 2018 arrangement never took legal effect because it lacked the telco’s signature and that it had paid Popote for development costs under a 2020 settlement.

Justice Mulwa was unsparing in his legal analysis.

He held that Section 32A of the Arbitration Act, which declares arbitral awards final, does not permit an award to stand when it is vitiated by jurisdictional defects or when it offends express statutory grounds for setting aside under Section 35.

In short, party autonomy cannot rescue an award rendered outside the scope of a lawful reference to arbitration.

The judge concluded that the award was inconsistent with the public policy of Kenya.

The High Court also rejected the tribunal’s central factual finding that Safaricom’s M-Pesa Super App and M-Pesa Business App were similar to the envisaged Popote Pay project.

The judge found no expert or reliable factual evidence demonstrating the required similarity, and he described the revenue figures on which the tribunal relied as speculative and hypothetical, failing basic reasonableness and evidentiary tests.

That speculative approach to damages proved fatal to Popote’s claim.

The backstory contains dramatic twists. After talks faltered, Safaricom paid Popote what has been reported as a goodwill or settlement payment.

Popote maintained that this payment did not extinguish broader contractual obligations, while Safaricom maintained the September 11, 2020 settlement settled development costs and foreclosed further claims.

Reporting and contemporaneous documents indicate that the settlement and the absence of a signed partnership agreement were central to the telco’s defence at both arbitration and in the High Court.

Lawyers and industry observers say the ruling is a cautionary tale for Kenya’s fintech startups.

The decision underscores that informal agreements, unsigned drafts and email exchanges are a perilous foundation for claims of intellectual property theft or revenue sharing against large, sophisticated corporates.

The judgment is likely to push innovators to insist on watertight, signed contracts and stronger evidentiary recordkeeping before exposing ideas to potential partners.

Popote had sought recognition and enforcement of the arbitral award in the High Court, but the judge dismissed that application and ordered that each party bear its own costs.

With the award set aside, Popote’s billion-shilling payday has evaporated and the spotlight returns to how early-stage tech firms protect their IP, document negotiations and prove the provenance of ideas when commercial deals go south.

This judgment will resonate across Kenya’s tech ecosystem where M-Pesa remains the dominant payments platform and disputes between large platform owners and small innovators are highly sensitive.

For now Safaricom can count a clear legal victory, while the ruling leaves unanswered questions for entrepreneurs about how best to convert technical ingenuity into enforceable commercial rights.​​​​​​​​​​​​​​​​