Boardroom brawl for SportPesa trademark spills to the court

The High Court Monday temporarily stopped Ronald Karauri and his new company Milestone Games Limited from using the SportPesa brand name, which is being claimed by two factions.

Milestone Games Ltd was barred from using “Sportpesa” name pending legal interpretation of a court case challenging an alleged fraudulent allocation of the trademark to the firm.

In a court petition filed as ‘urgent’, the High Court Judge Dorah Chepkwony directed that Milestone Games Limited and Sportpesa Global Holdings Limited be restrained from using the emblem until the matter is fittingly determined.

“That a temporary injunction be and is hereby issued restraining the 4th and 5th Defendants whether by themselves, their officers, agents, servants, proxies and or any other person acting under direction, control or authority from using the trademark number 74874 under Class 41 known as “Sportpesa” pending the hearing and determination of this application,” reads the judge’s ruling on May 16 2022.

The firm while reacting to the reports, denied any knowledge of the legal suit but insisted its business has not been wounded by the subpoena.

“We are not aware, we have read about it in the press. If we are served with court papers then our lawyers will deal with the matter accordingly. Our operations are not affected,” said a representative from Milestone on the matter.

The ruling now opens another episode of what has been an incessant vicious legal battle between the shareholders of Pevans East Africa Limited and its former directors.

The shareholder of Pevans EA Asenath Wachera Maina is accusing former Chief executive of Sportpesa Ronald Karauri, and former Sportpesa company secretary, Robert Macharia of fraudulently and illegally assigning the trademark to both Milestone Games Limited and SportPesa Global Holdings Limited.

A similar move was mooted two years ago.

The industry’s licensing board, Betting Control and Licensing Board (BCLB) in October 2020 blocked Milestones Games Ltd from operating the Sportpesa name in the Kenyan market.

It accused the firm of violating regulatory protocols by using the SportPesa trademark despite seeking approval from the regulator to initially operate as Milestone Bet.

That ban, however, lasted just weeks after the High Court in November of the same year overturned the betting’s board decision on the use of the brand name in the country.

Pevans East Africa was the first user of SportPesa brand name when the firm first registered in Kenya in 2014, sealing it as a major sporting brand. However, BCLB cancelled its license and the name faded from the market, albeit momentarily.

Milestone Games would then adopt the same brand name after BCLB authorized it to operate in the country in October 2020.

But the move would attract the regulator’s attention which in turn withdrew its license, claiming the SportPesa belonged to Pevans and therefore not available to any other firm.

Asenath is accusing Karauri and Macharia of assigning the SportPesa trademark to the two firms “without the approval of shareholders of PEVANS contrary to the express provisions of section 158 of the Companies Act No. 17 of 2015.”

In a witness statement, she states that on June 2, 2020, Ronald Karauri Executed a deed of assignment which transferred the Sportpesa trademark from Pevans Limited to Sportpesa Global Holdings Limited (SGHL) at a fee of GBP 100,000 which was offset by amounts Pevans purportedly owed SGHL.

In her court papers, Asenath says Mr. Macharia irregularly appointed himself the agent for SGHL and applied for registration of the Sportpesa trademark.

Both Karauri and Macharia, she continues to say signed forms requesting the registration of the Sportpesa trademark to SGHL which were lodged with the registrar of trademarks on September 14, 2020.

The move was accepted by the registrar who then issued a certificate of registration of assignment of the Sportpesa trademark to SGHL on September 15, 2020, adding that “curiously, the effective date of registration was retrogressively registered to be the 2nd of June 2020.”

On the 26th of October 2020, SGHL issued a notice indicating that Milestone Games Limited had been granted a five-year non-exclusive license over the Sportpesa trademark.

She now wants the court to expunge the assignment of the Sportpesa trademark to SGHL stating that the assignment was done fraudulently.

The hearing has been set for May 31.