The decision of the Supreme Court of Appeal of South Africa in Kingdom of Lesotho v Frazer Solar GmbH and Others (438/2024) [2026] ZASCA 75 raises an important question on the place of African States in international arbitration. The issue is not simply whether an arbitral award should be final. It is also whether finality should prevent a State from resisting enforcement where the contract itself may have been concluded without the approvals required by its laws.
The dispute arose from an agreement between the Kingdom of Lesotho and Frazer Solar GmbH, a German company, for the supply and installation of solar water-heating systems, LED lights and solar lanterns. The proposed project was valued at up to €100 million. It was signed on behalf of Lesotho by a minister in the Office of the Prime Minister, but it was later argued that the minister did not have the authority to commit the State without the approval of the Minister of Finance and Cabinet.
Frazer Solar commenced arbitration in Johannesburg after the project failed to proceed. Lesotho did not participate in the arbitration. In 2020, the arbitrator awarded Frazer Solar approximately €50 million, together with interest and costs. Frazer Solar then obtained an order from the South African High Court recognising the award and making it an order of the court.
Lesotho later challenged both the agreement and the enforcement order. By the time it sought to set aside the award in South Africa, however, the three-month period provided under Article 34(3) of the UNCITRAL Model Law had already passed. The majority held that Article 34(3) imposed a strict three-month period and that courts had no general power to condone non-compliance. Although an exception exists where an award is challenged on the grounds of fraud or corruption, the Court ultimately dismissed Lesotho’s attempt to set aside the award as being out of time.
This part of the decision is hardly surprising. Arbitration is intended to bring disputes to an end, and this objective would be defeated if parties were permitted to challenge awards whenever they considered it convenient. It must, however, be stressed that Lesotho’s failure to participate in the arbitration greatly weakened its position. If it believed that the minister lacked authority, or that the agreement violated its procurement and public-finance laws, these arguments should have been placed before the tribunal at the earliest opportunity.
The Court nevertheless rescinded the order enforcing the award. Lesotho had argued that relevant notices were concealed or intercepted and that it had not deliberately stayed away from the enforcement proceedings. More importantly, it raised a defence concerning the authority of the minister who signed the agreement. The controlling judgment found that Minister Tšolo lacked the necessary authority to bind Lesotho and that the State had established a bona fide defence with prima facie prospects of success. The enforcement order was therefore rescinded, although the Court did not finally determine whether the award should now be refused enforcement.
The importance of the decision lies in this distinction. The fact that an award can no longer be set aside does not necessarily mean that it must be enforced. Setting aside concerns the continued legal existence of the award, while enforcement concerns whether the courts of a particular country should permit execution of that award. In this case, the award remains in existence, but Lesotho has been given another opportunity to resist its enforcement.
This distinction is particularly important in Africa, where large infrastructure and energy contracts are often negotiated directly with senior government officials. The signature of a minister may create the appearance that the State has fully approved the transaction. This may not always be the legal position. Depending on the applicable national law, approval may still be required from Cabinet, Parliament, the treasury or the relevant procurement authority.
These requirements should not be treated as mere administrative inconveniences. They exist to ensure that public resources are not committed by one official acting without the necessary oversight. A contract involving millions of euros may eventually be paid for by citizens who were never part of its negotiation. The legality of the process through which the State was bound must therefore remain a serious consideration.
This does not mean that African States should be permitted to rely on their internal failures whenever a transaction becomes inconvenient. A State cannot allow its officials to negotiate and sign agreements, decline to participate in arbitration, and only become active once its assets face attachment. Such conduct weakens confidence in African markets and creates the impression that public law is being used to avoid commercial responsibility.
The case, therefore, raises concerns about the conduct and precautions taken on both sides of the transaction. Lesotho should have participated in the arbitration and raised its objections in time. Frazer Solar, for its part, had to satisfy itself that the official signing an agreement of this magnitude possessed the necessary authority and that all required approvals had been obtained. Political support for a project is not always the same as lawful approval.
The Frazer Solar decision is important for African-German commercial relations for precisely this reason. It shows that arbitration does not remove the need to understand how an African State legally enters into a contract. Foreign investors must take African constitutional, procurement and public-finance laws seriously. African States must, in turn, treat arbitration notices and proceedings with the seriousness that they deserve.
The award against Lesotho survives, but the question of enforcement remains open. This is not necessarily a contradiction. It is the result of Lesotho acting too late against the award while still presenting a defence that the enforcement court considered worthy of examination. The case is thus an important reminder that arbitration may provide finality, but finality does not remove every question concerning the lawful use of public power.
John Saidi Nyanje is a lawyer and researcher specialising in international investment law, international arbitration and dispute settlement in Africa.