THE German solar energy company, Frazer Solar says the total amount of their claim against the Lesotho government, including interest, currently exceeds M1 billion.
business
June 14, 2023
NEO SENOKO
3 min read
Frazer Solar says its claim against Lesotho exceeds M1 billion
Former minister in PM's office, Temeki Tšolo
Story highlights
The company accuses the government of failing to carry out the financial arrangement for the project
Frazer Solar further claims that Lesotho did not participate in the legal process
The energy firm, which is accusing the Lesotho government of a number of contractual violations pertaining to a renewable energy project signed in 2018, sees this as a significant legal development.
The company previously disclosed that it signed a contract in 2018 to deliver up to 40 000 solar water heating systems, 20 megawatts of photovoltaic power, one million LED lights, and 35 000 solar lanterns to the government of Lesotho.
While the German government agreed to fund the scheme, according to Frazer Solar, Lesotho failed to carry out the financial arrangement for the project, and the government did not participate in the legal process.
A former cabinet minister in Motsoahae Thabane’s administration, Temeki Tšolo, allegedly signed the aforementioned agreement on behalf of the Lesotho government.
In response to the alleged contractual violations, an independent arbitrator awarded Frazer Solar 50 million pounds in damages in January 2020.
The company's lawyers then started a global enforcement action against allegations made by Lesotho.
The firm has disclosed that the South African Ministry of Justice has backed a crucial argument in this protracted litigation, which is still pending.
“As Frazer Solar stated publicly in October 2021, the government of Lesotho filed its rescission application after the deadline. Therefore, it is not valid. Now, in June 2023, the South African Ministry of Justice agrees with our interpretation of the time bar issue. With interest accruing daily at current exchange rates, our claim now exceeds M1 billion.
“Frazer Solar will keep pursuing all legal means in any jurisdiction in the world until we recover every penny of what we are rightfully owed,” a Frazer Solar spokesperson said this week.
A South African high court heard the government of Lesotho's request to overturn the arbitration decision made in favour of Frazer Solar from June 6 to June 8. Frazer Solar contends that the government of Lesotho's legal challenge was filed too late, after the established dateline, so it should not be allowed, despite the fact that attorneys submitted thorough justifications for their individual cases.
This would imply that the arbitral award given to the company is unaltered.
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On the other hand, the government contends that Tšolo, who was at the time the minister in the Prime Minister’s office, was not duly entitled to sign the supply agreement in September 2018. Everything that happened after that would be void, including the arbitration award itself and the time for filing a legal appeal.
As a result, the arbitration decision would need to be quashed.
The supply agreement for the said renewable energy project had previously been found unlawful, unconstitutional, and invalid by the High Court of Lesotho, which was reviewed and overturned.
Frazer Solar, however, viewed the decision as irrelevant after it was made because it already had a legally binding, worldwide-enforceable verdict from an impartial arbitrator. The decision in this case was reserved, and when it is made, an update will be given.
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