Uganda’s mobile money operators were spared legal action after the country’s Commercial Court dismissed a challenge to the legality of mobile financial services.
The issue first arose last week, in a case brought by Bugweri County MP Abdu Katuntu which claimed that mobile money services should be regulated under the Financial Institutions Act.
Alongside second plaintiff Kimberly Kasana, Katuntu claimed that mobile money services should be illegal, as the UCC (Uganda Communications Commission) has licensed these firms as telecommunications companies rather than financial institutions. This would have dealt a major blow to Africell, Airtel, MTN, Uganda Telecom and Warid.
Justice Christopher Madrama initially appeared receptive to the suggestion, stating “MTN is not a financial institution. It needs to obtain a licence from either bank of Uganda or any other commercial bank to carry out financial businesses and operate mobile money.”
He added that making financial business transactions without an appropriate licence was a crime handled by the Director of Public Prosecutions (DPP). However, he went on to dismiss the case on the grounds that it should have been brought before a tribunal set up by the UCC to deal with proceedings on this subject.
The Uganda Communications Act requires the establishment of a tribunal and an office of a technical advisor to address matters related to telecommunications. The judge therefore ruled that a final decision was not the remit of the Commercial Court.
“We have no jurisdiction to ask Bank of Uganda to license mobile money as a financial institution. Any question as to the breach of license or acting outside a license, are matters that fall within the tribunal,” ruled Madrama.
For his part, Katuntu claimed that his case was in the public interest and pledged to appeal the decision on the grounds that his evidence had not been adequately considered. However, Madrama argued that Katuntu’s case was not a matter of citizenship, commenting "it is my considered view that issues to deal with citizenship should not be confused with those which deal with enforcement of fundamental rights and freedoms."
