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Govt awaits judgment in Frazer Solar lawsuit

By Thoboloko Ntšonyane

MASERU – The Deputy Prime Minister (DPM) who also serves as the Minister of Justice and Law, Justice  Nthomeng Majara has stated that the governing is anticipating the ruling on a case filed against them by the German company, Frazer Solar GMBH in Gauteng Division of the High Court in South Africa (SA).

This she told the nation recently in a televised speech.

Frazer Solar GMBH is pursuing a drawn-out legal battle against the government of Lesotho for what it alleges that the government has reneged on its contractual obligations. It feels that the government had failed to meet their alleged contractual obligations.

In the case that was heard from June 5 to 9,, DPM said one of the government’s submission is that it wants the court to declare Article 34(3) of the International Arbitration Act of 2007 as inconsistent with SA’s Constitution. Meanwhile SA is opposing this submission in its court papers.

She also told the public that Frazer Solar has instituted legal action against Lesotho and multiple countries including SA, Mauritius, the United Kingdom, and the United States of America. In these lawsuits, the embattled company is seeking reparations amounting to just over M1 billion for allegedly breaching the contract.

By way of background, in 2018, the government allegedly entered into an energy equipment supply deal worth over M2 billion with the Frazer Solar GMBH.

If the deal were to materialize, Frazer Solar GMBH was to supply the government with 350 000 solar lanterns, 40 000 SWHs equipment (Solar Water Heating) to replace electric geysers, and about 1, 5 million LED lights (Light Emitting Diode). The government had petitioned the court to review the contract entered into by the minister “without the authority of the Cabinet and the Minister of Finance”.

The unrelenting energy company had previously attached the government’s assets to this lawsuit: revenue from the Trans-Caledon Tunnel Authority (TCTA), an entity authorized by SA to pay Lesotho’s royalties from the water supplied to that country, the Lesotho Electricity Company (LEC) accounts with Eskom, Lesotho’s shares held in West Indian Ocean Undersea Cable Company which is in Mauritius and the Lesotho Highlands Water Project accounts held in SA.

Meanwhile, the LEC had since been delisted from the lawsuit.

The government had previously petitioned the court praying that it orders for the review of the agreement supply as it felt that entering into this contract would be inconsistent with the provisions of the Constitution, the Public Financial Management and Accountability Act of 2011 as well as the Procurement Regulations, 2007.

In its ruling last year, the Commercial Division of the High Court held that: “What is clear is that Minister [Temeki] Tšolo’s mind was dead set on concluding the agreement regardless of every conceivable legal impediment which stood in its way. Despite there not being Cabinet approval, Minister Tšolo and Mr Frazer, on 24 September 2018, signed the Supply agreement.”

“The Supply Agreement is declared unconstitutional, unlawful, and invalid, and is reviewed and set aside,” reads the judgment.

Reacting to this ruling, Frazer Solar GMBH said it welcomes the judgment but “fundamentally disagrees with the court’s decision” adding that “the ruling enables Frazer Solar and its legal team to re-start global enforcement proceedings against the Kingdom of Lesotho”.

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