Municipality wins temporary relief against Eskom over R230m debt, Newsline

A MUNICIPALITY owing Eskom over R230-million for electricity has won temporary relief against the power utility on a warpath to recoup billions of rand from defaulters.

The South Gauteng High Court, Johannesburg, has granted a stay order in favour of the Eastern Cape’s Walter Sisulu Municipality in its legal standoff against Eskom.

This stay order, granted by Acting Judge Shanaaz Mia, will bar Eskom from enforcing an order it won at the same court last month.

The October order gave Eskom the go-ahead to claim R231.2m from Walter Sisulu Municipality. Eskom described the October judgment as landmark because it strengthened its bid to recoup over R31bn in overdue debt from defaulting municipalities.

Walter Sisulu Municipality was ordered to pay the money it owed the power utility for unpaid electricity immediately.

It also had to hand over all money received from post-paying customers to Eskom and also furnish Eskom details of all its customers.

Approaching Judge Mia on an urgent basis, Walter Sisulu Municipality argued that the October order was granted in its absence. Officials were shocked when Eskom sent them the copy of the order.

The order was granted in an application brought by Pioneer Foods against Eskom.

Pioneer had sought to bar Eskom from limiting power supply in areas under the municipality’s jurisdiction. The company’s plants in Aliwal North were severely hampered by the power cuts.

The company failed to convince the court in October, and its loss went on to affect the municipality.

The municipality, one of five in the Eastern Cape owing Eskom over R1.3bn, was respondents along with Eskom in the Pioneer application.

It did not participate in the application, which explains why Eskom emerged with a judgment against it in absentia.

Eskom’s lawyers argued before Judge Mia that the municipality had itself to blame for the October judgment.

But Judge Mia found against this argument. “There was no notice to the municipality other than in the answering affidavit that Eskom would be seeking certain relief against it,” she said.

“This amounted to the respondent in the Pioneer urgent matter seeking urgent relief against another respondent.

“The Municipality ought to have had adequate notice that Eskom intended seeking relief against it and this could not have been in answer to a claim brought by Pioneer in the urgent application.

“Eskom was required to ensure that the Municipality was aware that it was seeking against the Municipality. This could have occurred by way of a counter application,” added Judge Mia.

Eskom also sought and obtained the October order despite its ongoing talks with the municipality.

“Eskom, in the Pioneer urgent matter, was aware that the Municipality had approached the Development Bank of Southern Africa for financing options and was also awaiting feedback from the MEC,” said Judge Mia.

In the end, Judge Mia issued an order staying the October order.

Political Bureau