Automated Summary
Key Facts
The case involves a dispute between the Music Copyright Society of Kenya (MCSK) and telecom companies (Safaricom, Airtel, Telkom, Huawei) over the collection and distribution of royalties for ring back tunes. MCSK claimed exclusive rights to manage royalties for copyrighted musical works, while the defendants argued they had licensing agreements with Premium Rate Service Providers (PRSPs) and copyright holders. The court dismissed MCSK's injunction application, finding no prima facie case for exclusivity, and ruled the suit not res judicata due to differing issues from a prior petition. KECOBO's amicus curiae application was rejected for perceived bias but was joined as an interested party.
Issues
- The court evaluated the procedural validity of the case being filed via originating summons, addressing whether the matter involved complex or contentious issues that should have been handled through a plaint, and ultimately dismissed the preliminary objection.
- MCSK sought an injunction to prevent Safaricom and others from distributing royalties for ring back tunes without MCSK's authorization, which the court dismissed after finding no prima facie case for exclusivity or irreparable harm.
- KECOBO applied to act as amicus curiae in the copyright dispute, but the court rejected the application due to perceived bias and lack of neutrality, though KECOBO was later joined as an interested party.
- The court determined that the current case was not res judicata with the pending HCCHR Petition, as the parties, issues, and subject matter were materially different, leading to dismissal of Safaricom's stay application.
Holdings
- MCSK's application for an injunction was denied because it failed to establish a prima facie case of exclusivity in collecting royalties. The court noted that MCSK's lack of a valid license under the Copyright Act and the existence of licensing agreements between defendants/interested parties and copyright holders undermined its claims. The absence of evidence for a valid license further invalidated MCSK's position as an exclusive assignee.
- The court dismissed Xpedia and Liberty's Preliminary Objection that the suit was improperly instituted by originating summons, citing the provisions of Order 37 Rule 19 of the Civil Procedure Rules which allow for conversion of an originating summons into a plaint if necessary. The court emphasized that the Objection's argument about the suit's complexity was invalid given the Rule's flexibility.
- The court rejected Safaricom's application to strike out the suit on the grounds of res judicata, finding that the issues in the current case are materially different from those in HCCHR Petition No. E435 of 2020. The prior petition challenged the constitutionality of specific statutory provisions, while the current suit focuses on MCSK's exclusive mandate to collect royalties.
- KECOBO's application to act as amicus curiae was rejected due to a perceived bias stemming from its prior litigation with MCSK and its brief supporting the defendants/interested parties. However, KECOBO was joined as an interested party to ensure its input in the proceedings, despite the rejection of its amicus role.
Remedies
- The court ordered that each party shall bear its own costs as no party succeeded in their applications. This applies to MCSK, Safaricom, KECOBO, and Xpedia/Liberty.
- Despite rejecting KECOBO's application to act as amicus curiae, the court determined that KECOBO has an interest in the matter and joined it as the 5th Interested Party to ensure the dispute is fully adjudicated.
- The court dismissed all applications and the preliminary objection filed by the parties. This includes MCSK's Notice of Motion, Safaricom's application to strike out/stay the suit, KECOBO's application to join as amicus curiae, and Xpedia/Liberty's preliminary objection. The court found no merit in these applications and rejected them in full.
Legal Principles
- The court assessed MCSK's application for an interim injunction under established criteria: prima facie case, irreparable injury, and balance of convenience. It concluded MCSK failed to demonstrate a prima facie case of exclusivity in royalty collection, leading to dismissal of the injunction.
- The court emphasized the substance over form principle when determining the admissibility of the originating summons. It held that while the procedural form (originating summons) might not have been ideal, the court could convert it into a plaint under Order 37 Rule 19, prioritizing the resolution of the dispute over strict procedural adherence.
- The court applied the principle of res judicata to determine whether the current suit was precluded by a prior petition (HCCHR Petition No. E435 of 2020). It found the issues and parties in the two cases were materially different, thus rejecting the argument that the suit should be stayed.
Precedent Name
- Mercy Munee Kingoo & another v Safaricom Limited & another
- Music Copyright Society of Kenya v Kenya Copyright Board & 2 Others
- Shadrack Bungel v Selina Jerotich
- Kenya Hotels Ltd v Oriental Commercial Bank Ltd
Cited Statute
- Constitution of Kenya
- Civil Procedure Rules
- Civil Procedure Act
- Copyright Act
- Competition Act 2010
Judge Name
- A. Mabea
- D. S. Majanja
Passage Text
- 65. MCSK has raised the issue of impartiality of KECOBO and the perception of bias against it. I have gone through the amicus brief attached in KECOBO's application and note that it tends to support the position taken by the Defendant and the Interested Parties that PRSPs and copyright owners are free to contract with each other and that CMOs such as MCSK have no exclusive right to receive and distribute royalties from the Defendants. MCSK has also stated that MCSK was involved mismanagement and loss of royalties collected on behalf of right holders and that its license has never been reinstated to date since the year 2020. My reading of this brief and the history of KECOBO and MCSK in HCCHR Petition No. E435 of 2020 leads me to conclude that an ordinary litigant will perceive the position taken by KECOBO in its brief to be biased and against MCSK. I therefore reject KECOBO's application.
- 47. Based on the provisions of Order 37 rule 19 of the Rules, I decline to strike out the Originating Summons merely because the suit ought to have been begun by a different pleading other than an originating summons. The Objection dated 06.10.2022 is therefore dismissed.
- 59. I note that both parties have relied on and have annexed Deeds of Assignment and Licensing Agreements that both assign such rights or license to the parties to deal in the copyrighted owners' rights and in return the parties collect and/or share out the royalties or monies collected from the use of those rights. These Agreements have not been impugned meaning that MCSK's argument of exclusivity cannot hold at this stage. I cannot also ignore the court's decision in HCCHR Petition No. E435 of 2020 which found that MCSK was a CMO within the meaning of the Copyright Act and therefore subject to lawful regulation including licensing by KECOBO. Safaricom have averred that MCSK holds no such license to act as a CMO and thus, is not able to act as a CMO in negotiating, collecting and distributing royalties on behalf of its copyright rights holders and members. This further negates MCSK's position as being the only entity that can collect and administer royalties as the absence of a license means that it cannot carry out those roles.