Moorosi Tsiane
THE government’s decision to terminate the controversial Nikuv contract has come back to haunt it, with the Israeli company now demanding US$2,243,103 (about M39 million) in unpaid dues and compensation for what it calls an unlawful termination of its e-passport deal.
Now trading as Pangea NGU Ltd, Nikuv has dragged the Ministry of Local Government, Chieftainship, Home Affairs and Police before the Commercial Division of the High Court, seeking M39,000,481.74 in unpaid maintenance fees and damages arising from the cancellation of its long-running contract.
The government entered into a controversial agreement with Pangea in March 2012 to design, supply and implement Lesotho’s civil registration, national identification, e-passport and border control systems.
However, in September 2024, Prime Minister Sam Matekane told the Lesotho Times that the government had decided to terminate the contract, saying the company “was no longer able to deliver on its mandate as per its contractual obligations”.
Mr Matekane also revealed that a new company had been engaged to take over from Pangea.
But that decision has now set in motion a costly legal battle.
Pangea argues that the Ministry of Home Affairs failed to adhere to the terms of their maintenance agreement.
“Following the expiry of the warranty periods under the design agreements, the Applicant (Pangea), duly represented by its authorised official, and the Ministry of Home Affairs, duly represented by Mamphaka Mabesa (Principal Secretary), entered into several written maintenance and support agreements renewed as and when required over a period of 13 years. The latest written maintenance and support agreement was concluded in September 2024,” Pangea’s court papers state.
The company says under the September 2024 agreement, the Ministry was obliged to notify it at least three months before the contract expired if it did not intend to renew the contract.
“The salient express, alternatively implied, further alternatively tacit terms of the September 2024 maintenance agreement were, inter alia, that the Ministry shall inform the Applicant three months prior to expiry whether they wish to renew the Agreement and negotiate new terms and conditions.”
Under the agreement, the Ministry allegedly agreed to pay a monthly maintenance fee of US$283,290 (nearly M4 million), broken down into services for the civil registration and national ID systems, the e-passport system, and the e-border control system. Yet, according to Pangea, the Ministry made only partial payments, leaving an outstanding balance of US$247,505 plus interest.
“The Ministry made partial payment for full professional service rendered for the months of June 2024 (US$236,075) and August 2024 (US$83,000). In the premise, the Ministry is indebted to Pangea in the amount of US$247,505 for the period June 2024 and August 2024 plus mora interest.”
(Mora interest is the general interest charged on overdue payments in a case where there is no specific interest rate agreed upon).
Pangea further claims that the Ministry of Home Affairs defaulted on payments for services rendered between October and December 2024, amounting to US$283,290 per month — a total of US$ 1,393,233, excluding interest. The company argues that the Ministry’s continued reliance on its systems amounted to a tacit extension of the agreement.
When the ministry finally terminated the contract on 30 December 2024, Pangea insists it did so without giving the required three-month notice.
“On 30 December 2024, absent providing the applicant (Pangea) three months’ notice as required, the Ministry cancelled the agreement. In the premises, the Applicant is entitled to three months’ payment in lieu of the cancellation notice period — USD 283,290 per month plus mora interest for January, February and March 2025.”
The company says it made several attempts to reach an amicable settlement, all of which were ignored.
“On 9 January 2025, the Applicant invoked clause 13.1 of the maintenance and support agreement, inviting the Ministry to negotiate an amicable settlement. On 28 January 2025 and again on 11 February 2025, further letters were sent, the latter expressly signalling the termination of settlement efforts in accordance with clause 14.1.”
Pangea adds that it served a formal notice in terms of the Government Proceedings and Contracts Act No. 4 of 1965 in May 2025, but the Ministry still failed to settle the debt.
“Notwithstanding the delivery of this notice, the Respondents have failed, alternatively refused, and alternatively neglected to comply with their payment obligations. Despite demands and invitations to amicably settle the matter — and despite the Ministry acknowledging its indebtedness — the Respondents have failed to make payment.”
All the outstanding amounts — including arrears for services between August and December 2024 and the three months’ cancellation payment for January to March 2025 — bring the total to US$2,243,103.
Pangea (or Nikuv before its renaming) is not new to controversy.
In December 2016, the Tel Aviv Magistrate’s Court fined the company NIS4.5 million (about M16.4 million) for bribing Lesotho’s then Home Affairs Principal Secretary, Retšelisitsoe Khetsi, with M5 million to influence the awarding of the M300 million tender.
The Israeli firm was controversially awarded the lucrative contract in 2012 — without an open public tender — to computerise Lesotho’s border control system and produce electronic passports, birth and death certificates, and national identity documents.
As part of a plea deal, the Tel Aviv court fined Pangea and ordered it to forfeit certain assets, cooperate with Lesotho law enforcement authorities investigating the bribery case, and revise its internal compliance policies to prevent future corruption.
In a bid to move away from its toxic past, the company then reincarnated itself as Pangea. In some Africa countries where it has operated, the company has also left some substantial stench. In Zimbabwe for instance, Nikuv was accused of helping the government of Robert Mugabe rig elections by manipulating voter registry processes.
