Sakeliga arguments in Resilient case finally put an end to power and water outages due to non-payment disputes

27 September 2021

Government institutions that provide services, including Eskom, will in the future no longer be able to disadvantage paying end users due to non-payment by municipalities. In fact, no dispute between any state institutions may further give rise to prejudice against paying end users. This principle, which was laid down in a ruling of the Supreme Court of Appeal last year in the Resilient case against Eskom in which Sakeliga was involved, has now become legal precedent. This, after the Constitutional Court denied Eskom’s application for leave to appeal in the Resilient case as well as a similar case in Sabie. 

As amicus curiae (friend of the court) in the Supreme Court of Appeal, Sakeliga underlined the need for intergovernmental dispute resolution and rational debt collection methods, pointing out that businesses and other end users cannot be held hostage in disputes between state institutions. The court agreed with these arguments. 

Piet le Roux, CEO of Sakeliga, emphasises that the implications of the Supreme Court of Appeal’s ruling in Resilient, which has now finally become binding legal precedent, are enormous. 

“State institutions in dispute over an issue such as debt collection must now turn to intergovernmental dispute resolution, and the National Treasury has a responsibility to intervene to help resolve disputes. Prior to this ruling, these processes were not followed and state institutions such as Eskom could pursue an easy way out – to hold paying end users hostage until debts are settled. “ 

Le Roux further points out that the real impact of the ruling extends far beyond disputes between Eskom and municipalities. 

“The ruling applies to all state institutions and comes down to the fact that state decay can no longer be made the problem of communities and private third parties. The national government also now has an undoubted duty to take responsibility for local and provincial state decay and can no longer deal passively with that responsibility. It is significant that the court is critical of the national government’s long-standing breach of duty in this regard.” 

Sakeliga is optimistic about the immediate relief for paying end users of public services nationwide brought about by the Resilient case. At the same time, Sakeliga believes that it will not be sustainable if Eskom remains unpaid by municipalities. For this reason, among others, Sakeliga has already initiated litigation in the North-West province and is asking the court to appoint a special paymaster in municipalities to ensure payment of suppliers such as Eskom from the amounts collected for services such as water and electricity. Eskom, a respondent, filed court documents this week in support of Sakeliga’s application. 

“Just as the Resilient case was not a complete solution, the special master litigation alone will not render municipalities functional. However, it is part of a proactive strategy to either restore proper governance and service delivery, or to create an alternative to relieve state institutions of burdens where they are unable to deal with them. Meanwhile, the Resilient ruling provides businesses, business chambers and local communities in general across the country with medium-term relief from severe and large-scale power outages,” said Le Roux.

Issued by Piet le Roux, CEO, Sakeliga, 27 September 2021