Eskom Holdings SOC Ltd and Another v Sonae Arauco (Pty) Ltd

Sonae Arauco (Pty) Ltd, a large industrial electricity consumer in Mbombela, alleged that it concluded an oral electricity curtailment agreement with the Mbombela Municipality in 2020. In terms of this alleged agreement, Sonae would limit its electricity consumption to 70% during periods of system stress in exchange for being excluded from loadshedding. During 2022–2023, Eskom implemented loadshedding at the Rockysdrift substation servicing Sonae’s factory after determining that the municipality failed to comply with required load reductions and lacked the capacity and metering to implement loadshedding properly. Sonae approached the High Court for urgent interim relief interdicting Eskom and the municipality from implementing loadshedding at its factory, pending final relief declaring the curtailment agreement valid and challenging the lawfulness of Eskom’s assumption of loadshedding functions. The High Court granted interim interdictory relief. Eskom and the municipality appealed to the Supreme Court of Appeal.

The appeal was upheld with costs, including the costs of two counsel. The High Court order granting interim relief was set aside and replaced with an order dismissing the application for interim relief (Part A) with costs.

This judgment affirms Eskom’s ultimate statutory responsibility to protect the national electricity grid and clarifies that municipalities’ failures to implement loadshedding lawfully and effectively trigger Eskom’s duty to intervene. It confirms the binding legal force of NERSA-issued Codes under the Electricity Regulation Act and limits the ability of individual customers or municipalities to contract out of loadshedding outside the strict framework of the Codes. The case is significant in delineating the hierarchy of authority in electricity regulation and safeguarding grid stability over individual commercial interests.