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JamboPay Chief Executive Danson Muchemi. (Photo: Courtesy)

Online payments service provider JamboPay has won a landmark case against its main rival over the use of the JamboPay trade name.

JamboPay has been embroiled in a protracted court battle with JamboPay Express that brings to the fore the pitfalls that start-ups face in the race to grow their businesses. In a ruling delivered last week, the High Court found the latter firm owned by Mombasa-based businessman Ariff Manji had infringed on the trade name “JamboPay” owned by software company Web Tribe, which runs the Nairobi County online payment systems for parking, rates, water and other services.

JamboPay is one of Kenya’s pioneer online payments system developed in 2009 while JamboPay Express was registered in 2012 and has operations in India and Kenya.

Web Tribe, which trades as JamboPay, had accused Mr Manji of using business secrets revealed to him during a botched bid to buy a 60 per cent stake in the firm to set up the rival online payments platform.

Created confusion

The High Court directed the registrar of companies to de-register JamboPay Express in the next two months.

“It is clear that the existence of the defendant’s name created confusion in the minds of existing customers,” said Justice Farah Amin in the ruling.

“The fact of misrepresentation is demonstrated by the similarity of names and the LinkedIn web page. The defendant has sought to benefit from that goodwill and has created the confusion to allow it to so benefit.”

Trouble began in 2012 when Danson Muchemi, the 33-year-old founder and chief executive of JamboPay, who was looking for investment in his fledgling firm, was introduced to Mr Manji by a friend.

Mr Manji offered Sh2 million for a share deal and at some point a joint venture between the two was considered. The deal, however, fell through and the money was said to have been converted into debt instead.

Mr Muchemi in court documents, however, argued that the two firms entered into intense deliberations during which Mr Manji’s technician from India was allowed to gain full access to JamboPay’s systems and employees.

Mr Manji is later said to have pulled out of the negotiations, registered JamboPay Express and took with him several JamboPay employees who had knowledge and access of the latter’s engagements, in contravention of contractual obligations. The court ruled the move by Mr Manji was in in bad faith and a calculated ploy on his part and JamboPay Express.