Pro-Serve wins Modipane–Mabalane road tender dispute
Goitsemodimo Kaelo | Tuesday August 4, 2026 18:47
The appellate court recently upheld appeals by Pro-Serve, ABSA Bank Botswana, and Unik Construction, setting aside orders that had restrained the release of funds earmarked for the road project and barred the takeover of the construction site pending adjudication proceedings between Pro-Serve and Tau Grading.
The dispute stems from the termination of a construction contract between Pro-Serve and Tau Grading. Pro-Serve had been appointed by government as Development Manager for the road project under the former Development Manager (DM) model, under which contractors entered into agreements with the development manager rather than directly with government.
Tau Grading suspended works after complaining that payment of Interim Payment Certificate No.10, allegedly due at the end of August 2025, had not been made. The contractor argued that previous payments had only been made after the government released funds and expressed concern about delays linked to the government's financial challenges. It demanded proof that Pro-Serve had adequate financial arrangements before continuing with the project.
Pro-Serve rejected the allegations, maintaining it had not breached the construction agreement. It argued that under the contract, its obligation to pay only arose after receiving corresponding payment from the government. The company accused Tau Grading of unlawfully suspending works without giving the required contractual notice and later terminated the contract, directing Tau Grading to vacate the site.
Tau Grading disputed the termination and referred the matter to adjudication in accordance with the dispute resolution provisions of the contract.
The contractor subsequently approached the High Court on an urgent ex parte basis after learning that Unik Construction was mobilising to take over the project. Tau Grading argued that it risked losing possession of the site and sought an anti-dissipation interdict preventing Pro-Serve and ABSA from releasing project funds until its claim had been determined. It also sought orders preventing Pro-Serve and Unik Construction from interfering with what it described as its lien over the project site.
The High Court granted a rule nisi before later confirming the interim orders, prompting appeals by Pro-Serve, ABSA, and Unik Construction.
The Court of Appeal first rejected Tau Grading's preliminary objection that the interim order was not appealable. The judges held that although the order was interim in form, its effect was sufficiently final to justify an appeal because the substantive contractual dispute would ultimately be resolved through adjudication rather than further High Court proceedings.
The appellate court also found that the rule nisi had lapsed because it was never formally extended during several postponements before confirmation.
Even so, the judges proceeded to examine the merits and concluded that the High Court had erred in granting and confirming the interim relief.
The court criticised the decision to entertain the application on an ex parte basis, stressing that such proceedings should only be used in exceptional circumstances where giving notice would defeat the purpose of the application. It found Tau Grading had failed to demonstrate that notifying the respondents would have caused irreparable prejudice.
The judgment observed that ex parte orders often place respondents at a significant strategic disadvantage because they are confronted with an existing court order that is costly and difficult to overturn.
'One reason why ex parte orders are generally so unfair is because they confront the unwitting respondent with a fait accompli. It is true that, as here, an unnotified respondent is entitled to anticipate the return date of a rule nisi. But that simple fact does not take into account the enormous, and often unfairly gained, strategic advantage that stealing a march on the opposing party confers on the ex parte applicant,' read part of the judgment.
The court further held that Tau Grading failed to establish the legal requirements for an anti-dissipation interdict. It noted that no monetary claim had yet been made in the adjudication proceedings and found no evidence that Pro-Serve or Unik Construction intended to dissipate assets to frustrate any future judgment.
The judges also ruled that Tau Grading had not shown it lacked an adequate alternative remedy. Should it ultimately succeed in the adjudication, it would still be entitled to pursue damages for any unlawful termination of the contract. The fact that recovering those damages might prove difficult did not justify the extraordinary relief sought.
Finding that Tau Grading had failed to satisfy the requirements for an interim interdict, the Court of Appeal concluded that the High Court had misdirected itself in confirming the rule nisi. The appeal was upheld, with costs awarded against Tau Grading, bringing to an end the interim court orders that had frozen project funds and restrained the continuation of works on the Modipane–Mabalane road.