Court Setback for Lesotho Highlands Dam Compensation Claims

Lesotho's High Court, sitting as the Constitutional Court, recently delivered a procedural setback to thousands of villagers and businesses seeking compensation for losses incurred due to the Lesotho Highlands Water Project (LHWP). The court rejected a constitutional challenge, ruling that the applicants had pursued the wrong legal process. It held that claims for alleged underpayment or non-compensation for land, livelihoods, and businesses affected by the Katse, Mohale, and Polihali dams should be brought under ordinary legislation in the High Court, rather than as a direct constitutional challenge. This decision clarifies the appropriate legal avenue for such disputes, without adjudicating the merits of the compensation claims themselves, thereby keeping the door open for claimants to seek redress through civil litigation.

A recent ruling by the High Court of Lesotho, sitting as the Constitutional Court, has introduced a significant procedural clarification for thousands of individuals and businesses seeking compensation related to the multi-billion-rand Lesotho Highlands Water Project (LHWP). The court declined to exercise its constitutional jurisdiction, effectively rejecting a direct constitutional challenge brought by affected communities. This decision, delivered in May and released in writing last week, mandates that compensation claims arising from the construction of the Katse, Mohale, and Polihali dams must be pursued through ordinary legislative channels in the High Court, rather than as constitutional litigation.

This ruling, while a procedural setback for the applicants, does not preclude their underlying claims for compensation. Instead, it underscores the critical importance of selecting the correct legal forum and framework for complex disputes involving statutory obligations and property rights. For legal practitioners in Lesotho, this judgment provides crucial guidance on the appropriate strategy for litigating LHWP-related compensation matters, redirecting focus towards established civil remedies under existing legislation. This article will delve into the background of the LHWP compensation framework, analyse the court's reasoning, and explore the implications for future litigation and affected communities.

The Lesotho Highlands Water Project (LHWP) is a monumental bi-national undertaking between the Kingdom of Lesotho and the Republic of South Africa, established by the 1986 Treaty on the Lesotho Highlands Water Project. Its primary objectives are to transfer water from the Senqu/Orange River system to South Africa's industrial heartland and to generate hydroelectric power for Lesotho. The Lesotho Highlands Development Authority (LHDA) is the implementing agency within Lesotho, mandated not only to construct and operate the project but also to safeguard the welfare of communities directly impacted by its activities.

Central to the LHWP's operational framework is a comprehensive compensation policy designed to mitigate the adverse effects on local populations. This policy is rooted in the 1986 Treaty, the LHDA Order of 1986, the LHWP Compensation Regulations, and the Phase II Agreement, alongside relevant national legislation such as the Constitution of Lesotho and the Land Act of 2010. Despite these provisions, communities displaced or affected by the construction of major dams like Katse, Mohale, and the ongoing Polihali, have consistently alleged inadequate, delayed, or non-existent compensation for lost land, livelihoods, and communal resources over several decades. These grievances form the bedrock of the numerous legal challenges against the LHDA.

The recent constitutional challenge was initiated by over 3,000 individuals and 889 businesses, organised under entities such as the Mokhotlong Business Forum Development Trust and the Community Resources Development Trust. Their application sought declarations that the construction of the dams violated constitutional protections for property and livelihoods, primarily due to the LHDA's alleged failure to provide prompt and full compensation, including interest. Furthermore, they sought orders compelling the LHDA to disburse outstanding compensation, establish promised community development funds, and provide contract-related benefits.

The High Court of Lesotho, sitting as the Constitutional Court, ultimately declined to exercise its constitutional jurisdiction. Justice Polo Banyane, delivering the judgment for the full bench, articulated that the core of the dispute revolved around the LHDA's compliance with its statutory obligations regarding compensation, rather than the direct interpretation or enforcement of constitutional rights. The court affirmed that Lesotho's Constitution permits it to decline constitutional litigation where adequate alternative remedies are available under existing legislation. Crucially, the ruling did not delve into the merits of whether the LHDA owed compensation or whether communities had been unlawfully underpaid, focusing solely on the procedural appropriateness of the constitutional challenge.

This decision effectively redirects claimants to pursue their grievances through the ordinary civil courts, specifically the High Court and Magistrates' Courts, where they have recourse to adequate legal remedies under existing legislation. This approach aligns with the principle that constitutional litigation should generally be a last resort when other legal avenues are insufficient. The distinction drawn by the court is significant: while the constitutional *route* was deemed inappropriate, the *substantive right* to compensation, rooted in the LHWP Treaty, the LHDA Order, and national laws, remains enforceable. This is evidenced by previous successful litigation, such as the November 2025 Court of Appeal ruling in favour of the U Khopo Maliba-Matšo Society, which compelled the LHDA to pay long-overdue compensation to over 600 villagers affected by the Katse Dam. That judgment explicitly stated that the LHDA could not use internal policies to override its constitutional and statutory duty to compensate.

Furthermore, the current legal landscape in Lesotho already features numerous ongoing compensation lawsuits against the LHDA in the High Court. These include claims for M20 million and M140 million brought by various cooperative societies and associations, alleging unpaid compensation under Phase I policies and Memoranda of Understanding. These cases demonstrate the viability and effectiveness of pursuing compensation claims through the ordinary civil process, reinforcing the Constitutional Court's directive. While a 2025 High Court ruling dismissed a gender discrimination challenge related to LHWP Phase II compensation, it did so on the basis that the policy itself was gender-neutral, even while acknowledging issues in its practical disbursement. These varied outcomes underscore the complexity of LHWP compensation litigation and the necessity for claimants to navigate the legal framework strategically.

The recent decision by the High Court of Lesotho, sitting as the Constitutional Court, represents a pivotal moment for LHWP compensation claims, albeit a procedural one. It serves as a clear directive to legal practitioners that while the right to compensation for communities affected by the LHWP is enshrined in various legal instruments, the appropriate avenue for enforcing these rights is through the ordinary civil jurisdiction of the High Court, rather than via direct constitutional challenges. This is not a denial of the claims' potential merit but a clarification of the proper legal process.

For attorneys representing affected communities and businesses, the implication is clear: future litigation must be meticulously framed around the LHDA's statutory obligations, contractual agreements, and established compensation policies. The focus will now shift to proving non-compliance with these specific legal instruments and quantifying damages within the framework of civil procedure. The ongoing success of other compensation claims in the High Court and Court of Appeal provides a roadmap for practitioners, indicating that while the constitutional shortcut has been closed, the path to justice through conventional litigation remains open and viable. Practitioners should prepare for detailed evidentiary processes to substantiate claims of inadequate or delayed compensation, ensuring that the long-standing grievances of affected communities are finally addressed.