Claims as German company continues fight after failed project agreement
MASERU – A Belgium court has recognised Frazer Solar GmbH’s €50 million arbitration award against Lesotho and issued an order allowing the company to seize her foreign assets in the European country, according to a statement issued by the German company this week. The statement further claims that the seizure also includes the bank account of the Lesotho embassy in the country’s capital, Brussels.
This enforcement followed an international arbitration ruling against Lesotho, concerning a series of contractual breaches related to a renewable energy project that was to be developed by Frazer Solar. In January 2020, an independent arbitrator awarded the company €50 million in damages. In May 2021, Frazer Solar’s lawyers commenced a worldwide enforcement action against assets held by Lesotho – but this was contested by the Lesotho government in both local and South African court of law.
According to Frazer Solar statement a company spokesperson said: “Despite the attempts of Lesotho’s former Prime Minister Moeketsi Majoro to evade or obstruct enforcement proceedings, it’s clear that Frazer Solar’s binding arbitration award is enforceable around the world. We note that in the Hand Over document provided by the former Prime Minister Majoro’ administration to the incoming Matekane administration of 31 October 2022, it states that battling Frazer Solar has been ‘expensive on the fiscus’ and the government is ‘indebted’ as a result. This needs not be so.
We urge Prime Minister Matekane to leave the blunders and errors of Dr Majoro in the past and work with Frazer Solar to find an amicable solution. Failing that, we will continue pursuing the Kingdom of Lesotho in any international jurisdiction where it holds assets until we receive all monies owed to us.” The Attorney General, Advocate Rapelang Motsieloa, however, speaking to Public Eye this week dismissed these Frazer claims. “That information is misleading. The company approached the Belgian court cunningly, and alone. What they are saying is absolute hogwash,” he said.
A lawyer representing Frazer Solar a fortnight ago in a case in which they being sued by the Lesotho government after the botched energy supply contract has taken a swipe at the country, accusing it of breach of the deal by failing to accordingly finance it. Advocate Pearce Rood told the Constitutional Court that although Frazer Solar had identified a suitable funder, it was the Lesotho’s contractual obligation to secure funding.
The case continues before Chief Justice Sakoane Sakoane assisted by Justices Moroke Mokhesi and Realeboha Mathaba. The government of Lesotho has instituted legal action against Frazer Solar in which it is seeking a review and setting aside of the decision by the former minister in the Office of the Prime Minister, Temeki Tšolo, to appoint Fraser Solar as a sole supplier of solar energy and power equipment to Lesotho. The country is facing the loss of revenue from water and power sales to South Africa and may see its share of an undersea communications cable seized after it breached the terms of a contract with solar power company Frazer Solar GmbH.
Under a global enforcement order, following the award of the €50 million in damages in an arbitration case in South Africa, Frazer said it had taken legal action to seize royalties that would be paid to Lesotho’s government by the Trans-Caledon Tunnel Authority SOC as well as payments for power from Eskom Holdings SOC Ltd. It had also had Lesotho’s share in the Mauritius-based West Indian Ocean Cable Co. provisionally seized. In this case Frazer Solar was awarded damages by South African arbitrator Vincent Maleka for Lesotho’s alleged breach of a deal suspiciously struck between the government and the German company involving supply of solar energy and power equipment to Lesotho over four years. The deal was allegedly signed in 2018.
It is alleged that a binding agreement was sealed in 2018 between Frazer Solar and Lesotho for the provision of up to 40 000 solar water heating systems, 20MW of solar photovoltaic capacity, one million LED lights and 350 000 solar lanterns nationwide. Subsequently, Frazer Solar in April last year applied to the High Court in Gauteng petitioning it to endorse the arbitration award and allow the company to garnish Lesotho revenue from the water royalties from South Africa in terms of the treaty signed in 1986. That prompted former Prime Minister Moeketsi Majoro to request a reversal of the award to Frazer Solar as damages.
On November 4, lawyers representing the Lesotho government, noted that Frazer Solar had requested an urgent case management meeting with a view of seeking a postponement of the Lesotho Stay Application, the TCTA Application and the SAG (South African Government) intervention application.” This was subject to all concerned parties agreeing to liaise with one another to find new dates for the hearing of the applications set down or November 10 to 12 with such dates suiting the parties. The South African government also intervened in the matter. It argued in the application that granting Frazer Solar damages from Lesotho’s revenue due to it from the Lesotho Highlands Water Project (LHWP) would irreparably harm the diplomatic relations between the two countries.
In his handover report to the incoming administration former Prime Minister Majoro’s government said Lesotho has approached the high court to nullify the contract between it and Fraser Solar – which appears to have been entered into fraudulently and by circumventing set procedures. Another somewhat similar case is that of the contract between Lesotho Communications Authority and CVG which government has also approached the High Could of Lesotho to nullify, the report notes. “Litigating the Fraser case has been onerous and quite expensive on the fiscus. The Government is indebted to the African Development Bank for the support it has lent to the legal process against Fraser Solar. It is disappointing to note that in all these nefarious acts, there are Basotho who are ready to assist.”