Lesotho’s High Court has refused to hear a commercial dispute between a property owner and an energy company, ruling that the matter must go to arbitration as the parties originally agreed.
In the case of Tumo Tlelai vs Tholo Energy (Pty) Ltd, the court declined jurisdiction after finding that a binding arbitration clause in the parties’ sub-lease agreement left no room for litigation.
The dispute stems from a sub-lease agreement signed in July 2020, under which Tholo Energy was given control of a filling station. The agreement became effective in September 2022. Difficulties arose when Tlelai accused the company of failing to pay more than M6.6 million in advance rent, as well as monthly rental fees.
Tlelai approached the High Court seeking an order compelling payment of the outstanding amounts. Tholo Energy, however, raised a preliminary objection, arguing that the court lacked the power to hear the case because both parties had agreed that all disputes would be settled through arbitration. The company also noted that a related matter involving the same parties was already before the court.
Tlelai countered that attempts to resolve the dispute through arbitration had been made but had failed, and that the company was deliberately delaying the process. He asked the court to intervene. The court was not persuaded.
“The dispute is clearly one that must be resolved through arbitration.”
High Court of Lesotho · Tlelai vs Tholo Energy (Pty) Ltd
In its ruling, the court confirmed that the sub-lease agreement clearly required all disputes to go to arbitration. The judge explained that courts are bound to respect contracts freely entered into by parties, particularly where those parties have chosen arbitration over litigation.
The court further stressed that arbitration agreements are binding unless there are compelling reasons to set them aside. The judge found no such reason in this case. The court accordingly declined to hear the matter on its merits and made no order on the substance of the claim.
Tlelai was ordered to pay the legal costs of the application.
The ruling reinforces the legal weight of arbitration clauses in commercial contracts and signals that Lesotho’s courts will not readily entertain disputes where parties have already agreed on an alternative resolution process.
