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By Chris Ndaliso 
1 hour ago
Durban – ESKOM has suffered an embarrassing defeat in its attempt to cancel a R5.2 billion fuel tender with the black-owned Econ Oil company when an arbitrator ruled that a contract existed between the two parties.
Econ Oil had taken the matter to arbitration when the power company decided to cancel the tender, and Eskom questioned the adjudicator’s jurisdiction over the matter.
The arbitrator, Kevin Trisk SC, said he felt the parties concluded a valid, binding and enforceable contract on November 8, 2019.
It said that the defendant’s (Eskom) conduct in denying the existence of a valid contract constituted a repudiation of it, and that Eskom was obliged to place all its orders for the supply, delivery and discharge of fuel oil of various grades 1, 2 and 3 for its 11 coal-fired power plants under the contract.
“The plaintiff (Econ Oil) for damages in respect of past breaches of the contract in the amount of R21 618 633 and for damages in lieu of specific performance for each month that the defendant does not fulfill its obligations under of the contract in the amounts established in the plaintiff’s filings dated November 2, 2020, provided that the calculation of such damages instead of a specific performance begins as of August 2020, ”the Trisk ruling reads.
Econ Oil claimed that it was entitled to various forms of compensation against the energy company.
The company requested reparation in the form of a declarant (a legal action by which a judicial declaration of a fact is obtained) to the effect that Eskom, on or around July 31, 2020, repudiated a contract that the company He maintains that he celebrated with the parastatal.
Eskom has been denying the existence of the contract with the oil supplier, however, it admitted that a letter of acceptance was granted to the company.
Eskom spokesman Sikonathi Mantshantsha said the power company would not currently comment on this matter.
“Eskom will litigate through the courts, not through the media,” he said.
According to the award report seen by the Daily News, the plaintiff (Econ Oil) sought, in effect, four types of redress, namely a plea: that Eskom’s conduct of denying the existence of a valid contract constituted a repudiation of the contract; that, by necessary implication, a valid, binding and enforceable contract was entered into between the parties and that the parastatal is obliged to carry out all its orders for the supply, delivery and discharge of fuel oil of various grades 1, 2 and 3 for its 11 power plants of coal under the contract.
The company also sought damages in respect of prior breaches of contract and damages in lieu of specific performance for each month Eskom failed to fulfill its obligations under the contract.
“The plaintiff also requests the costs of the award procedure. I will not make a decision regarding this type of relief. The defendant, in turn, seeks, in essence, two types of relief, namely that: “(a) adjudicator never has jurisdiction to determine … (if ‘… the parties … have a binding contract. .. ‘). Refusing to exercise jurisdiction on this basis does not require the adjudicator to decide that no contract exists. The plaintiff claims that an award letter was signed on behalf of the defendant on November 1, 2019 and by the plaintiff on November 8, 2019. ”
The letter, which the Daily News has seen, read: “Dear Madam, this serves as confirmation that there is a contract between Eskom Holdings SOC Ltd and Econ Oil & Energy (Pty) Ltd for a period of five (5) years for the supply, delivery and offloading of fuel oil to various Eskom grade 1, 2 and 3 coal-fired power plants in Arnot, Hendrina, Duvha North, Grootvlei, Kendal, Komati, Kusile, Lethabo, Matimba and Camden ”.
Econ Oil Managing Director Nothemba Mlonzi could not be reached for comment.
In his assessment, Trisk said: “Entrepreneurs often record the most important deals in a crude and summary way; Sufficient and clear modes of expression for them in the course of their business may seem to those unfamiliar with the business far from complete or precise. Consequently, it is the court’s duty to interpret such documents fairly and broadly, without being too astute or subtle to find fault.
“The documentation that has been considered in this document inevitably results in the following conclusions, namely that: the parties sought to enter into a contract for the supply of fuel oil by the plaintiff to the ‘coal power plants’ designated by the defendant at prices and volumes agreed between the parties; and the contract was entered into on November 8, 2019 on the basis that the claimant would be the sole and exclusive supplier of the fuel oil in question with respect to the identified coal-fired power plants; and the defendant has refused to fulfill the contract thus concluded and maintains that said contract never came into being; and as a consequence, he has repudiated the contract. I am obligated to dismiss the arguments of the defendant and defend those raised by the plaintiff, ”Trisk said.
Daily News
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