File photo: Pexels
File photo: Pexels

Local firm, IPP in legal spat over foiled contract

By Bulelwa Payi Time of article published Oct 13, 2019

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A month after an international renewable energy company was requested to withdraw a request in a wrangle with a local company, it has so far failed to do so.

The matter is now set to be argued before the Western Cape High Court.

In summons served on Globeleq SA, entrepreneurial company New Tech Electrical Supplies claimed that more than R1 million for enterprise development it was promised.

New Tech accused Globeleq SA of failing to honour the enterprise development funding it had agreed to provide.

New Tech filed a motion in bar on Globeleq to which the latter responded with a plea and shortly afterwards a request of security for costs in the sum of R350000.

However, the request for security was rejected on the basis that in terms of the applicable law, New Tech was an incola (inhabitant) of the Republic of South Africa and was not required to furnish costs.

Although the rule sets out exceptions, those were inapplicable to the case, New Tech argued, adding that the request was “malicious” and a strategy to delay the proceedings.

Globeleq was asked to withdraw the request, but had yet to respond to the request.

Globeleq’s lawyers refused to comment on the matter saying it was “sub judice”. 

“We trust that you will understand and you will respect the position of our client as well as the court processes,” a statement from the lawyers said.

Globeleq is one of the world’s leading independent power producers and also has business interests in Africa, with operations in countries such as South Africa, Tanzania, Cote d’ Ivoire, Cameroon and Kenya.

In South Africa, the company’s business interests are in renewable energy and it also runs a wind farm in Jeffrey’s Bay, and two solar plants in De Aar and Droogfontein.

Both plants are part of the South African government’s Renewable Energy Independent Power Producers Programme.

In order to score points and comply with the Codes of Good Practice and contribute to the objectives of Broad-Based Black Economic Empowerment (B-BBEE), multi national companies are expected to make contributions to enterprise developments to help the economy and growth of small and medium enterprises.

New Tech has claimed in the summons that were served on Globeleq that in November 2017 it entered into an enterprise development agreement with Globeleq SA in terms of which the multi-national company would provide a grant of R1.5m to assist the small company transform its service offering to panel washing and vegetation control.

But it claimed that Globeleq failed to support it as an emerging supplier operating in the community and to transform its service offering and as a result of the alleged breaches, it could not procure the requisite equipment and systems.

In one of the emails exchanged between the parties, New Tech was urged to read, sign and return the contract together with an invoice for panel washing at the pilot site.

Things took a turn when Globeleq accused New Tech of including a mark-up on the pricing of the services which were sourced from another company.

New Tech claimed that it was not aware that it should not have done so and that the matter could have been handled better instead of ending the contract.

The company also claimed that the information on the pricing was obtained without New Tech’s knowledge in that Globeleq engaged the contracted supplier directly.

Weekend Argus

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