Ekurhuleni in R85m tender battle at SCA after bank account attached

Ekurhuleni metro is fighting a prolonged legal battle in the Supreme Court of Appeal (SCA) against a private company that had the metro’s bank account attached over an R85m debt.

The legal battle was initiated in 2022 by Business Connexion, the private company that was awarded a tender by the metro to provide software licences.

The company sued the municipality over the unpaid bill and in January 2023 the high court in Johannesburg ordered the municipality to pay the company R85m with interest.    

To recoup the funds, the court’s sheriff attached the metro’s bank account and 16 vehicles in November 2023.

The bank account under attachment, according to the metro, was important as Germiston’s municipal customers used it to pay for services, such as rates, taxes, water and electricity.   

Funds paid into the account are transferred into the metro’s treasury account and consumers are then credited to their water and lights consumer accounts.

After being denied leave to appeal by the high court, the metro approached the SCA, arguing the work Business Connexion had been contracted for had not been done. Leave to appeal was granted.

While awaiting the SCA’s decision to hear the case, Ekurhuleni metro approached the Johannesburg high court in January 2024 to suspend its order in which it instructed it to pay R85m as Business Connexion had secured a writ of execution to attach the municipality’s bank account.

The high court ruled in the metro’s favour. The SCA heard the matter on Monday last week.    

The metro argues there is no evidence Business Connexion delivered the software licences to the municipality.

“The high court ordered the municipality to pay R85,479,535 for something (software licence keys) it did not receive and which BCX (Business Connexion) did not prove had been delivered,” the court papers read.   

“The municipality denies that BCX delivered the software licence keys. In the high court and its papers before the SCA, the municipality pointed out that it had raised this issue from the beginning immediately after BCX alleged that it had delivered the licence keys and that it had maintained this stance throughout.”   

Business Connexion contends that the licence keys were delivered to the municipality by their service provider, Oracle.    

The SCA has reserved judgment.

Municipal bank accounts have increasingly been attached due to debt. Last year, Eskom announced the sheriff had attached Emfuleni municipality’s four bank accounts over an R8bn debt owed to the power utility.   

sinesiphos@businesslive.co.za