By Lehlohonolo Lehana.
Eskom scores a significant victory in the Supreme Court of Appeal (SCA), which ordered that Letsemeng Local Municipality in the Free State must repay its R108.5 million to the power utility in full.
“On 9 March 2022, the SCA ruled that the [municipality] must pay Eskom all amounts, in respect of the electricity it receives from Eskom, when such amounts are due and payable, in terms of the electricity supply agreement concluded between the parties,” the power utility stated.
“The SCA was also critical of the dishonesty of the municipality in its dealings with Eskom, which it described as disgraceful.”
The court awarded costs against the municipality.
Eskom said the Supreme Court directed the municipality to:
- Pay to Eskom such portion of the equitable share that relates to electricity within 24 hours of receipt of the equitable share
- Pay all arrear debts due and payable to Eskom per the terms of the acknowledgement of debt and payment plan concluded between the parties
- Pay the R5 million the National Treasury had made available to the municipality for the payment of its electricity debt
The judgement followed a long-running legal battle in which Eskom had been trying to recover money owed by the municipality, which was over R41 million in arrears in January 2020.
This had ballooned to R108.5 million by the end of February 2022, despite several agreements by the municipality to discharge its debt, Eskom said.
In this ground-breaking judgement on the issue of municipal debt, the SCA laid down clear legal principles which uphold Eskom’s right to receive payment for the bulk electricity it suppliers to municipalities,” the power utility said.
“The appeal was instituted by Eskom against the decision of the Free State High Court which had earlier dismissed Eskom’s application which sought to compel the municipality to pay for the bulk electricity received from Eskom.”
According to Eskom, The SCA has now upheld its entitlement to receive payment from the municipalities for the bulk electricity it supplies them.
The ruling also said that even if the municipality raises a dispute with Eskom, it must still pay in terms of the Electricity Supply Agreements.