A Kenyan court ruled that the country’s leading operator Safaricom was justified in suspending startup Bitpesa’s access to its M-Pesa mobile money service, according to the Daily Nation.

Bitpesa, which aims to undercut traditional remittance payments by using Bitcoin, and Lipisha, another payments firm, sued Safaricom for preventing them accessing M-Pesa.

“A reading of the commercial agreement between Lipisha Consortium and Safaricom reveals that Safaricom could suspend, not terminate, the services even without notice and for any valid reason,” said Justice Joseph Onguto.

Lipisha, which provides its service to third parties, struck an agreement with Safaricom in 2011. Among the third parties is Bitpesa.

The operator suspended its service to Lipisha, saying the startup had to obtain approval from the Central Bank of Kenya (CBK) before offering it access to M-Pesa.

The central bank previously ruled that so long as Bitpesa dealt in Bitcoin, it could not use the words “money remittance” or “money transfer” to describe its service. CBK also stated it does not regulate virtual currencies.

In addition, Safaricom argued Bitpesa does not meet its anti-money laundering requirements.

“It would appear to me that Safaricom was justified in ensuring that its own licence was not ultimately questioned or put in jeopardy for so long as the CBK had failed or neglected to put its (Safaricom) fears to rest,” ruled the judge.

However Bitpesa’s CEO Elizabeth Rossiello blogged defiantly: “Today the judge ruled that this case will continue on for further judgment. This could be a lengthy process, as are many legal cases around the world.”

“Importantly, the judge also found that Bitpesa is strong enough to sustain its business for the duration of this potentially long trial, even without access to the M-Pesa network,” she added.

She argued the case was not about the legality of Bitcoin in Kenya but about Bitpesa standing up to an incumbent “with its internal operations and compliance policies laid bare before the court”.

“That Safaricom has moved against us shows that we have already won,” she claimed.