THE South African High Court has postponed all cases related to Fazer Solar’s fight with the government over the latter’s alleged breach of a M1, 7 billion deal for the supply of solar power to Lesotho.
The two parties have sued and counter-sued each other after Frazer Solar was awarded £50 million (M856 million) damages by a South African arbitrator for the government’s alleged breach of the two parties’ solar power deal.
The German company is suing for the enforcement of the arbitration award while Lesotho wants the award nullified on the grounds that it was fraudulently entered into with government officials who were not empowered to negotiate and sign such deals.
The cases had been scheduled to be heard in the Gauteng High Court from 16 May to 16 June 2022.
However, in a statement this week, Prime Minister Moeketsi Majoro’s press attaché, Buta Moseme, said the cases had been postponed to allow the Lesotho High Court to first hear Dr Majoro’s application to nullify the £50 million (M856 million) damages award to Frazer Solar.
“Yesterday (Tuesday), 19th April in Johannesburg, the government of Lesotho successfully applied for the postponement of cases in South Africa pending finalisation of the review application in the High Court of Lesotho,” Mr Moseme said in a brief statement.
In his application filed on 21 September 2021, Dr Majoro wants the Lesotho High Court to nullify a 2019 South African arbitration award of damages to Frazer Solar.
The premier argues that Lesotho cannot be held liable for an agreement that was clearly founded on “falsities”.
“The Kingdom cannot be bound to an agreement that includes an undertaking and clauses that are clearly false and known to the parties that purported to sign the agreement,” Dr Majoro states in his court papers filed at the Lesotho High Court.
“It will be against public policy to hold the Kingdom to an agreement that is clearly founded in falsities and was concluded with the ulterior purpose of creating obligations that the Kingdom would have already breached as soon as the agreement was concluded. Significantly, I note that these breaches are what Frazer Solar relied upon in its claim against the Kingdom in the arbitration.”
Dr Majoro accuses former minister in the prime minister’s office, Temeki Tšolo, of “fraudulently and corruptly” signing the botched deal on behalf of the government.
Dr Majoro says he had no right to negotiate and sign such an agreement. Mr Tšolo has denied signing the deal on behalf of the government.
But Dr Majoro insists that he signed and, in the process, violated national laws which stipulate how such contracts are agreed and how payments to third parties are made.
He accuses the former minister of acting outside his powers by “clandestinely” signing the agreement without the knowledge and approval of parliament, cabinet and himself as the finance minister at the time.
“Minister Tšolo undertook to commit the Kingdom to the financing agreement without parliament’s approval. In light of the provisions of the constitution and statutory framework, it could never be permissible for a minister in the Office of the Prime Minister to conclude an agreement of the nature of the supply agreement concluded by Minister Tšolo.
“He acted unlawfully and beyond his powers and abused his discretion when he concluded the agreement without the approval or cooperation of the Minister of Finance, parliament, cabinet or the procurement unit…His actions in appointing Frazer Solar and concluding the supply agreement were unreasonable and fall to be reviewed and set aside,” Dr Majoro argues.
He further argues that the deal should have been negotiated and signed by the Ministry of Energy and Meteorology, not by Mr Tšolo.