Kingdom of Lesotho v Frazer Solar GmbH [2026] ZASCA 75
The Supreme Court of Appeal rescinded the order enforcing Frazer Solar's €50 million award against Lesotho, but held that article 34(3)'s three-month limit barred Lesotho's late bid to set the award aside.
In Kingdom of Lesotho v Frazer Solar GmbH and Others, the Supreme Court of Appeal of South Africa rescinded the order enforcing Frazer Solar's award but refused to set the award aside. The reason was the sharp line between two ways of attacking an international arbitral award. Lesotho was too late under article 34 of the United Nations Commission on International Trade Law Model Law on International Commercial Arbitration (Model Law), as adapted by South Africa's International Arbitration Act 15 of 2017 (International Arbitration Act). But Lesotho could still resist enforcement under article 36, because the Model Law leaves enforcement defences for the enforcement stage.
Background
Frazer Solar, a German company, obtained a 50 million euro arbitral award against Lesotho after arbitration in Johannesburg. Lesotho did not appear in the arbitration or in the later enforcement application before the Gauteng Division of the High Court, Johannesburg. The High Court made the award an order of court, and Frazer Solar then pursued execution against Lesotho's assets.
Lesotho later said the dispute had reached arbitration through an unauthorised government contract. Minister Temeki Tšolo, a Minister in the Office of the Prime Minister, had signed a renewable-energy supply agreement for Lesotho. Lesotho argued that he lacked authority because the project had not received Cabinet approval and had bypassed procurement and public-finance controls. A Lesotho court later set aside the supply agreement and the arbitration clause, but the South African appeal did not turn simply on that later judgment.
Lesotho wanted both rescission of the South African enforcement order and setting aside of the award itself.
The Court's Decision
On setting aside, Lesotho lost. Article 34(3) of the South African version of the Model Law gives a party three months to apply to set aside an award. It contains a special timing rule for fraud or corruption, but Lesotho had not challenged the award or contract on that basis. The controlling judgment held that South Africa made a deliberate legislative choice: courts have no general power to condone late article 34 applications outside the statutory fraud-or-corruption exception.
That conclusion did most of the work. The court relied on the International Arbitration Act's policy of finality and limited court intervention, the South African Law Reform Commission materials, and article 5 of the Model Law. The court also applied the strict time-limit principle from ABC Co v XYZ Co Ltd. It rejected Lesotho's argument that access to courts required a broader discretion to extend time. Parties who choose international arbitration accept a more confined court-control system, and the court found article 34(3)'s time bar constitutionally justified.
On enforcement, Lesotho won a narrower point. The court accepted that Lesotho had shown good cause to rescind the enforcement order: it had a credible explanation for its default, and it had a bona fide defence to enforcement. Lesotho's article 36 defence attacked recognition and enforcement on capacity and validity grounds. A court may refuse recognition or enforcement if a party to the arbitration agreement lacked capacity or if the agreement was invalid under the governing law. Lesotho had a serious case that Minister Tšolo lacked authority and that the supply and arbitration agreements were invalid.
The Supreme Court of Appeal did not finally decide Lesotho's article 36 defence. It held only that the defence was serious enough to justify rescinding the default enforcement order. The result is narrow but concrete: Frazer Solar's award still exists, while the 2021 South African order enforcing it no longer stands.
Result
The Supreme Court of Appeal rescinded the enforcement order granted on 29 April 2021, but dismissed Lesotho's appeal against the refusal to set aside the arbitral award. The practical result is a split outcome: Frazer Solar's award survived the article 34 challenge, but Frazer Solar must still face Lesotho's article 36 objections if it wants enforcement in South Africa.