With judgment reserved in the high-stakes legal battle between the Government of Lesotho and German-based Fraser Solar GMBH (FSG), attention now shifts to Bloemfontein, where the Supreme Court of Appeal of South Africa is expected to deliver its ruling.
Attorney General Advocate Rapelang Motsieloa KC told this publication that the judgment is expected in the not-so-distant future, although a specific date has not yet been confirmed. The outcome will carry significant implications for both parties, possibly determining the financial future of the Lesotho government and the credibility of Fraser Solar’s claims.
Fraser Solar, whose claims now exceed €58 million (approximately M1.2 billion), has been embroiled in a marathon legal dispute with Lesotho over an alleged energy equipment supply contract signed in 2018.
The deal was intended to provide 350,000 solar lanterns, 40,000 solar water heating units, and 1.5 million LED lights to Lesotho. It was reportedly signed by former Minister in the Prime Minister’s Office, Temeki Tšolo, during Motsoahae Thabane’s administration, with Dr. Moeketsi Majoro serving as Minister of Finance at the time.
However, the government later backtracked on the agreement, arguing it was unconstitutional and in violation of the Public Financial Management and Accountability Act of 2011 and the 2007 Procurement Regulations.
This triggered a protracted legal fight across multiple jurisdictions, including courts in South Africa, the United States, Mauritius, and the United Kingdom, and led to attempts by Fraser Solar to attach Lesotho’s assets abroad, including those of the Lesotho Electricity Company.
In 2023, the Gauteng Division of the High Court ruled in Lesotho’s favour, a decision Fraser Solar appealed, now awaiting a final outcome in the appellate court.
Central to Lesotho’s case is the assertion that the agreement was neither approved by cabinet nor processed through constitutional procurement channels, rendering it “unconstitutional, unlawful, and invalid.”
The Commercial Division of the High Court of Lesotho echoed that stance, noting: “What is clear is that Minister Tšolo’s mind was dead set on concluding the agreement regardless of every conceivable legal impediment.”
The court found that the supply and arbitration agreements were void from the outset.
Despite these rulings, Fraser Solar has relentlessly pursued enforcement of the arbitration award, which had previously been granted uncontested in South Africa.
Currently, the government of Lesotho is seeking to annul both the arbitration award under Article 34 of the Model Law (as provided in South Africa’s International Arbitration Act of 2017) and the court order that recognised that award.
During his outgoing address on October 28, 2022, former Prime Minister Majoro warned incoming Prime Minister Sam Matekane about the costly burden of the Fraser Solar lawsuit. The case has already drained public funds to pay for high-profile legal representation in South Africa.
If the Supreme Court finds in favour of Fraser Solar, it could compel the government to pay a substantial amount from an already strained national budget, a potential fiscal blow with far-reaching consequences for Lesotho’s development agenda.
