Supreme Court throws out Airtel’s appeal against CFTC’s K2.1bln fine
Malawi Supreme Court of Appeal has refused to grant Airtel Malawi’s appeal for a stay of the whopping total fine of K2,113,099,006 which Competition & Fair Trading Commission (CFTC) imposed on the mobile phone service provider for unfair trading practices.
In September, CFTC ordered Airtel to pay the fine for what was described as ‘unreasonable’ behaviour to customers over Khethekhethe loyalty bonus programme.
Airtel responded to the ruling first through a public statement, denying the charges levelled against it when the company appeared before the CFTC and further said it “did not agree with the consequential decision” made by the CFTC.
Thus Airtel took the matter — first through the High Court and later to the Supreme Court but in his ruling made on Friday, Justice Lovemore Chikopa contends that Airtel failed to show what the company wants to be done about the fine, saying the court was just told that the fine is huge.
Airtel told the Court that the huge fine will adversely impact on its operations and also questioned CFTC’s jurisdiction in handling the matter in the first place.
Justice Chikopa said Airtel was of the view that CFTC had no jurisdiction to hear and determine the complaint was untenable, saying: “We respect there is only one question in this matter. It is whether or not the Applicant has shown, on a balance of probabilities, that it will be occasioned an irretrievable injustice if a stay is not granted.
“The answer can only be in the negative. The fact that the fine is huge, and it is by all standards huge, is not itself evidence of potential or actual injustice. More has to be shown to establish injustice.
“Similarly, it is not enough to say that paying the fine now would adversely impact the Applicant’s operations — more has to be proof of such allegations. We have not been shown any such proof in the instant case.”
Justice Chikopa also said Airtel failed to provide proof that CFTC will not be able to repay the fine if the appeal is successful.
The Court also says appears Airtel “is not even sure what it should do about the fine”, saying “in one breath it seems to want to place the matter [of deciding what to do with the fine] before the High Court” and in another breath “to bring it before the Supreme Court”.
“True this might be as a result of the High Court itself not being sure whether this matter is a commercial matter or not. Or where any dissatisfaction with the fine should be pursued.
“If truth be spoken that is of little consequence it at all. A party should itself be sure what it wants from which court. It should never go to law hoping that the courts will give it advice or directions on how best to proceed with its matter.”
The ruling quoted the Constitutional Court ruling of Maziko Charles Sauti Phiri v the Privatization Commission & Attorney General (number 13 of 2015) that said “courts are not in the habit of giving gratuitous advice to litigants”.
“We would be most reluctant therefore to grant a stay just to allow an applicant time to ask one or the other court for guidance on how it should proceed with this matter,” said the ruling that thus refused the Airtel’s application for a stay with costs.
In the statement after CFTC’s determination, Airtel Malawi’s Managing Director, Charles Kamoto had said the company “complies and continues to fully comply with the relevant and applicable laws and has not committed any unfair trading practice or provided any misleading, false or deceptive information or made false representation to the public.
“We wish to reiterate our commitment to conducting business within the applicable legal and regulatory framework and continue to deliver reliable and value-adding services”.
CFTC ruled that that Airtel was flouting regulations by “engaging in unconscionable conduct” with respect to the rewarding of the Khethekhethe bonus.
CFTC acting executive director Apoche Itimu had said they launched an investigation on September 16, 2021 following several complaints from consumers, alleging Airtel stopped automatically crediting into customer accounts with monthly bonuses.
According to the complaints to CFTC, customers were required to apply for the redemption of their bonuses on the 14th of every month but they were being forfeited if they were not redeem.
Itimu said it was further alleged that the unredeemed bonuses were later appropriated and sold to other customers on the 15th and she claimed that Airtel Malawi made a financial gain of about K2.1 billion, thereby acting “unreasonably and without conscious.”
Airtel introduced the Khethekhethe loyalty bonus programme on March 1 this year, in which customers were able to instantly redeem KhetheKhethe airtime royalty bonus when they make a call, buy a bundle or use internet worth K1,000 and above.
The past bonus reclaim system was through customers dialing *600# on the 14th of every month.
The KhetheKhethe service, according Airtel Malawi, comes with more rewards to customers on any day of the month that they transact in which — after buying airtime or data of K1,000 and above (in multiples of K1,000) — the customers are meant to get a notification SMS that they have received their instant bonus.
Khethekhethe, according to Airtel, involves using airtime to browse the Internet (data bonus of 100MB valid for a day); buying a data bundle (data bonus of 100MB valid for a day); using airtime to make a call (coming with a voice bonus of five minutes Airtel to Airtel) and buying a voice bundle (also with voice bonus of five minutes Airtel to Airtel).
Headquartered in Lilongwe, Airtel Malawi Plc is one of the country’s leading mobile service providers offering 4G/LTE, 2G and 3G wireless networks and and high speed flat broadband internet services.
The subsidiary of Airtel Africa Plc — a Pan-African telecommunications company with operations in 14 countries across Africa — also offers the largest mobile commercial service in the country through Airtel Money which was launched in Malawi in February 2011.
The CFTC was established under the Competition and Fair Trading Act of 1998 with a mandate to regulate, monitor, control and prevent acts or behaviours which would adversely affect competition and fair trading in Malawi.
Any person may lodge a complaint against unfair trading practices with the Commission, at no charge and is mandated by law to investigate unfair trade practices including violations of consumer rights and is tasked to taking all necessary steps to facilitate redress.
The Commission is also mandated to handle complaints and investigates restrictive business practices.
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