LSP Construction PTY Ltd V CNQC International Holdings Ltd & 13 Others (CIV/APN/0047/2024ND) [2025] LSHC 248 (19 May 2025)

# LSP Construction PTY Ltd V CNQC International Holdings Ltd & 13 Others (CIV/APN/0047/2024ND) [2025] LSHC 248 (19 May 2025) [ __](https://api.whatsapp.com/send?text=https://lesotholii.org/akn/ls/judgment/lshc/2025/248/eng@2025-05-19) [ __](https://twitter.com/intent/tweet?text=https://lesotholii.org/akn/ls/judgment/lshc/2025/248/eng@2025-05-19) [ __](https://www.facebook.com/sharer/sharer.php?u=https://lesotholii.org/akn/ls/judgment/lshc/2025/248/eng@2025-05-19) [ __](https://www.linkedin.com/sharing/share-offsite/?url=https://lesotholii.org/akn/ls/judgment/lshc/2025/248/eng@2025-05-19) [ __](mailto:?subject=Take a look at this document from LesLII: LSP Construction PTY Ltd V CNQC International …&body=https://lesotholii.org/akn/ls/judgment/lshc/2025/248/eng@2025-05-19) [ Download PDF (330.1 KB) ](/akn/ls/judgment/lshc/2025/248/eng@2025-05-19/source) Report a problem __ * Share * [ Download PDF (330.1 KB) ](/akn/ls/judgment/lshc/2025/248/eng@2025-05-19/source) * * * * * Report a problem __ ##### LSP Construction PTY Ltd V CNQC International Holdings Ltd & 13 Others (CIV/APN/0047/2024ND) [2025] LSHC 248 (19 May 2025) Copy citation * __Document detail * __Related documents Citation LSP Construction PTY Ltd V CNQC International Holdings Ltd & 13 Others (CIV/APN/0047/2024ND) [2025] LSHC 248 (19 May 2025) Copy Media Neutral Citation [2025] LSHC 248 Copy Hearing date 14 April 2025 Court [High Court](/judgments/LSHC/) Case number CIV/APN/0047/2024ND Judges [Dr. Shale J](/judgments/all/?judges=Dr.%20Shale%20J) Judgment date 19 May 2025 Language English ##### __Collections * [Case indexes](/taxonomy/case-indexes) * [Commercial](/taxonomy/case-indexes/case-indexes-commercial) * [Civil Procedure](/taxonomy/case-indexes/case-indexes-commercial-civil-procedure) * [Parties](/taxonomy/case-indexes/case-indexes-commercial-civil-procedure-parties) * [Legal action on behalf of a company](/taxonomy/case-indexes/case-indexes-commercial-civil-procedure-parties-legal-action-on-behalf-of-a-company) * [Company Law](/taxonomy/case-indexes/case-indexes-commercial-company-law) * [Legal personality](/taxonomy/case-indexes/case-indexes-commercial-company-law-legal-personality) Summary Read full summary * * * Skip to document content **IN THE LAND COURT OF LESOTHO** **(NORTHERN DIVISION)** **HELD AT LERIBE CIV/APN/0047/2024ND** **In the matter between:** **LSP CONSTRUCTION (PTY) LTD APPLICANT** **AND** **CNQC INTERNATIONAL HOLDING LIMITED 1 ST RESPONDENT ** **QINGJIAN GROUP 2 ND RESPONDENT ** **TUWANA CONSTRUCTION** **LESOTHO (PTY) LTD 3 RD RESPONDENT ** **LI YUFU 4 TH RESPONDENT ** **ZHENHUA WANG 5 TH RESPONDENT ** **NING HE 6 TH RESPONDENT ** **PENGFEI 7 TH RESPONDENT ** **ZUTARI – LESOTHO (PTY) LTD 8 TH RESPONDENT ** **SINOMA TBEA CONSORTIUM 9 TH RESPONDENT** **LOWLANDS WATER DEVELOPMENT PROJECT 10 TH RESPONDENT** **PRINCIPAL SECRETARY MINISTRY OF** **NATURAL RESOURCES, MINING** **AND WATER AFFAIRS 11 TH RESPONDENT** **PRINCIPAL SECRETARY – MINISTRY** **OF FINANCE 12 TH RESPONDENT** **THE TREASURE- MINISTRY OF FINANCE 13 TH RESPONDENT** **_ATTORNEY GENERAL 14 TH RESPONDENT _** Neutral citation: LSP Construction (Pty) Ltd v CNQC International Holding Limited & others [[2024] LSHC 107](/akn/ls/judgment/lshc/2024/107) CIV/APN/0047/2024ND (19 May 2025) **CORAM: DR I. SHALE J** **HEARD : 14 th April 2025** **DELIVERED: 19 th May 2025** **_SUMMARY_** _Application for attachment to found jurisdiction – whether a company incorporated, registered and operating in Lesotho could be regarded as a foreign entity (peregrinus) due to its foreign management and control – company’s status determined by its incorporation, registered office and place of business – third respondent therefore an incola not a peregrinus – application for attachment of property belonging to first respondent in relation to the third respondent’s debt dismissed._ **ANNOTATIONS:** **Cited Cases** * RSMS Construction (Pty) Ltd v Baxoleni (Pty) Ltd & 2 Others [[2023] LSHC 102](/akn/ls/judgment/lshc/2023/102) Comm (20 February 2023) * Bisonboard Ltd v K Braun Woodworking Machinery (Pty) Ltd 1991 (1) SA 482 * Young v Anglo American South Africa Limited & Others [2014] EWCA Civ 1130 **Legislation** * Companies Act 2011 * High Court Civil Litigation Rules, 2024 **JUDGEMENT** **INTRODUCTION AND BACKGROUND** [1] This is an application brought by the Applicant, LSP Construction (Pty) Ltd, seeking attachment of property to found jurisdiction against the First to the Tenth Respondents. The Eleventh to the Fourteenth Respondents were later joined in the proceedings on the basis that they are in possession of certain monies due to the First Respondent which monies, Applicant seeks to attach. The application is primarily directed at the Third Respondent, TUWANA Construction - Lesotho (Pty) Ltd, a company which, Applicant alleges, had sub-contracted Applicant to do certain works but failed to pay Applicant as per the said agreement. Hence Applicant instituted action against Third Respondent and now seeks to attach property to found jurisdiction of the court to determine that action. Third Respondent is a company incorporated in Lesotho, with a registered office in Maseru and engaged in business in Lesotho. [2] The First and Second Respondents are companies which are both registered in the Republic of China. Applicant alleges that First Respondent, CNQC International Holdings Limited although registered in China, has a number of subsidiaries globally including Second Respondent, QINGJIAN GROUP (Pty) Ltd which also has subsidiaries, including Third Respondent, TUWANA Construction – Lesotho (Pty) Ltd. On this basis, Applicant’s case is mainly that the First and Second Respondent companies are the parent or controlling companies of the Third Respondent. The Fourth to Nineth Respondents are shareholders of the Third Respondent. [3] The Application was initially moved on urgent basis on 25th February 2025 at 2:30 p.m. and the following prayers were sought: “1. That the ordinary rules of service of this honourable court relating to notice and service of process be dispensed with on account of urgency of this matter. 2\. That a rule nisi issue be (_sic_) and is hereby issued and made returnable on the date and time to be determined by this honourable court calling upon the respondents to show cause, if any, why the following orders shall not be made absolute: (a) An order directing that the Applicant be granted leave to attach and remove the properties fully stated in annexure “A” herein belonging to the 1st to 7th Respondents valued at M37 347 583.59 (thirty seven million three hundred and forty-seven thousand five hundred and eighty-three [Maloti] and fifty-nine cents) in order to found and/or confirm jurisdiction of this honourable court over the 1st to 7th Respondents pending the completion of the matter in CCT/0009/25ND pending before this honourable court namely:- **ALTERNATIVE** to (a) above, (c) That the 1st to 7th Respondents herein be ordered and directed to pay into this honourable court the sum of M37 347 583.59 (thirty-seven million three hundred and forty-seven thousand five hundred and eighty-three [Maloti] and fifty-nine cents) to confirm and/or found jurisdiction of this honourable court so much so that the property mention in (a) above may be released to them pending the finalization of the matter in CCT/0009/25ND pending before this honourable court. (d) that the respondents be ordered and directed to pay the costs of this application on a punitive scale of attorney and own client’s scale. (e) that the applicant be granted such further and/or alternative relief as this honourable court may deem fit. 3\. That prayers 1 and 2(a) operate with immediate effect as an interim relief hereof.” [4] Having heard Advocate Motsie for the Applicant, the court ruled that the matter was not urgent and he was ordered to follow the normal rules relating to the _ex parte_ applications as he could not justify the delay in lodging the application. [5] On 31st March, the application in its current form was brought before my sister Mokhoro J who referred the matter back to this court on account that there was a dispute as to whether it was initially dismissed or merely removed from the roll. [6] On 14th April 2025 when Advocate Motsie appeared before me, the application was followed by another, in which he sought an order to join the 11th to 14th Respondents to the proceedings and to amend the Notice of Motion. This second application as couched in the following terms: 1. That the applicant be granted leave to join the 10th to 14th joinders herein as the 10th to 14th respondents to the main application in CCA/0009/25ND pending before this honourable court. 2. An order directing that the applicant be granted leave to attach and remove the payments that are due to the 2nd respondent in the sum of M37 347 583.59 (thirty-seven million three hundred and forty-seven thousand five hundred and eighty-three [Maloti] and fifty-nine cents) that is held with the 12th respondent Ministry under the 13th respondent and is due for payment to the 2nd respondent for the construction of the distribution systems for the Lesotho Lowlands Water Development Project Phase II at Tsikoane, Maputsoe and Mpharane in the district of Leribe under contract No.RFB No. LLWDP/06 in order to found and/or confirm jurisdiction of this honourable court over the 1st – 7th respondents pending the completion of the matter in CCT/0009/25/ND pending before this honourable court. 3. That the respondents be ordered and directed to pay the costs of this application only on a punitive scale of attorney and own client’s scale. 4. That the applicant be granted such further and/or alternative relief as this honourable court may deem fit. **ISSUES FOR DETERMINATION** [7] Having heard the facts which gave rise to the claim and arguments on all the requirements relating to attachment of property to found jurisdiction as contained in the High Court Civil Litigation Rules, 2024 (hereinafter referred to as the “2024 Rules”, Rule 22 thereof, the main issue which this court is called upon to determine is whether the Third Respondent, despite being incorporated and domiciled in Lesotho, can be regarded as a _peregrinus_ based solely on its ownership or control by foreign entities and shareholders being the First to Seventh Respondents. The other question is whether this classification can justify the attachment of property which does not belong to the Third Respondent, but to its alleged parent, the Second Respondent herein. **APPLICANT’S CASE** [8] I must indicate that this application was not served upon the Respondents on the grounds that doing so shall defeat the ends of justice and that Rule 22(3) of the 2024 Rules states that “ _Such application shall be made ex parte…_ ” The Applicant therefore decided to move the application _ex parte_. In the circumstances, this judgement is based only on arguments presented by the Applicant. On the date of hearing, having made oral submissions in pursuit of the prayers in the Notice of Motion, Advocate Motsie was tasked with making written submissions to illustrate if he has satisfied the requirement that the Third Respondent is a _peregrinus_ contemplated under Rule 22 (2) of the 2024 Rules and he duly submitted such. [9] He argued that the court should consider Third Respondent as a _peregrinus_ because of the control which the First and Second Respondents have over its operations including the fact that payment of its debts is being done from the First Respondent’s bank account. This is further reiterated in the written submissions in which he submitted that: _In relation to the present contract, though Tuwana is a contractor in relation to the applicant, the payment of invoices by the applicant were effected from the QingJian Account held with Standard Lesotho Bank Account No. 9080006041260 following an instruction to do so by first respondent in China as is reflected in annexure LSP 4. For completeness, the third respondent does not have its own construction equipment but uses the property of the parent company namely the second respondent.**[1]** _ [10] In the written submissions, it is conceded on behalf of the Applicant that third Respondent is a company registered in terms of the laws of Lesotho. It is specifically stated that: _The third respondent is admittedly a company registered in terms of the laws of Lesotho and satisfies the requirements of Section 82 and 83 dealt with in the preceding paragraphs. On the face of it therefore, it could be said to be a national of the Kingdom of Lesotho.**[2]**_ [11] It is argued further that: _That however, can only be_ _true in relation to transactions that are lacking an International character. The present application arises out of facts and circumstances arising out of an international commercial contract. The international character of the contract_ _is derived from an award by the Kingdom of Lesotho to a consortium of companies whose nationality is China. This is the first and second respondents.**[3]**_ [12] It must be mentioned however, that while there is a contract between the Kingdom of Lesotho and First Respondent, the contract whose debt is the basis of the main action, was entered into by Applicant and the Third Respondent. The First Respondent was not party thereto. The only nexus between these parties is the above allegation that First Respondent made payments due to Applicant on behalf of the Third Respondent. [13] While during oral argument Advocate Motsie seemed to grasp the issue on which to address the court, to my surprise in his written submissions he summarises the issue as: _whether this honourable court has jurisdiction over the third respondent on any ground recognised by law…_ _The_ _question that arises_ _in relation to the third respondent is whether it is subject to the jurisdiction of this Court as a corporate entity and the basis for such jurisdiction? Is it on the basis of residency or on the basis of domicile. That in turn revolves around the question of characterisation of the residence or domicile of a company._[4] [14] Applicant based its case on the case of **Bisonboard Ltd v K Braun Woodworking Machinery (Pty) Ltd.**[5]**** Applicant’s submission with regard to this case is that: _The majority per Hoexter JA in whose judgment Botha JA and Goldstone AJA concurred came to the conclusion that since the question of residency of a company is based on the parallel of the same concept in relation to natural persons, it is somewhat abstruse and nebulous. The majority came to the conclusion that the idea the registered o_ _ffice of a corporation is its home or its residence was a jurisdic abstraction that is not unsound in principle (see page 493).****_ [15] Applying the principles in **Bisonboard** to the present case, Applicant made the following submissions: _When regard is had to the fact of management and control of the third respondent being in China, it is our respectful submission that domicile is not established either. In fact, it is respectfully submitted that the third respondent is simply a shell company and has no separate residency or domicile of its own from its controlling company… In the circumstances, it is respectfully submitted that the third respondent has been correctly joined in an application to found jurisdiction or alternatively to confirm it.**[6]**_ **ANALYSIS** [14] I must hasten to mention that what Advocate Motsie identified as the issue for determination, is not what this court together with him identified as the thorny issue which falls for determination and on which he was directed to make submissions on. The question which he was directed to address was not whether or not the Third Respondent has been correctly joined but to justify the argument that the Third Respondent loses its nationality by virtue of control and management by foreign entities and shareholders and therefore a _peregrinus_ as contemplated in Rule 22(2). This is because the Rule requires amongst others that Applicant must satisfy the court that it has a _prima facie_ cause of action against a _peregrinus_ and that the property attached belongs to the _peregrinus_ and lastly, that the applicant is an _incola_ while the respondent is a _peregrinus._ [15] Having satisfied the court that Applicant is an _incola_ , the question which the court had to determine is why Applicant had joined the First and Second, as well as Fourth to Seventh Respondents to the proceedings who admittedly are of foreign nationality but had no dealings with Applicant. Secondly, the court wanted to understand why Applicant seeks to attach the property which belongs to a respondent who is not a party to the contract which is a subject matter of the main claim. [16] Advocate Motsie argued that while on the face of it, Third Respondent is a Lesotho company, there are factors which render it a shell company and therefore the foreign parent companies being the ones liable for the debt in question and for their property to be attached to found jurisdiction of this court over them. This court has a serious difficulty to accede to the proposition by Advocate Motsie. In order to appreciate the context of this difficulty it is imperative to deal with the law and authorities on the subject. I proceed to deal with those in the succeeding paragraphs. [17] It is a settled principle of Lesotho law that the attachment of property to found jurisdiction is permissible only where the defendant is a _peregrinus_ , that is, a party not domiciled within the jurisdiction of the court. The purpose is to found jurisdiction and to secure satisfaction of judgment. Hence the Applicant is this case has an obligation to prove that the Third Respondent, against which it has a claim, is a _peregrinus._ In this regard, **Rule 22(2)** provides as follows: ****_(2) The applicant shall satisfy the court:_ _(a) that he has a prima facie cause of action against the peregrinus;_ _(b) that the property sought to be attached is the property of the peregrinus or that the peregrinus has some right in the property;_ _(c) that the applicant himself is an incola and that the respondent is a peregrinus; and_ _(d) the applicant may in the same application apply for leave to serve the respondent by edictal citation._ [17] See also**RSMS Construction (Pty) Ltd v Baxoleni (Pty) Ltd & 2 Others **where Kopo J reiterated that: _“… Rule 6 (2) provides that in an application for attachment to found or confirm jurisdiction the Applicant should satisfy the court that he has a prima facie cause of action against the**peregrinus** , that the property is that of the peregrinus and that the Applicant is an incola of Lesotho and the Respondent a **peregrinus**._[7]__(Emphasis added). **[18]** In his written and oral submissions, Advocate Motsie concedes that at all material times the Applicant had an agreement with the Third Respondent. He concedes further that the Third Respondent is a company registered in Lesotho under the **Companies Act 2011**. However, basing himself on the **Bisonboard** decision, he argues that by reason of being controlled abroad, and being subsidiary of the Second Respondent which in turn is a subsidiary of the First Respondent, then Third Respondent cannot be said to be domiciled in Lesotho. I consider this argument to confuse the issue of domicile of a company and that of its nationality. [19] In terms of the company law, a company assumes nationality of the country in which it is registered; in this case Lesotho. It is also an established principle of company law that upon registration, a company obtains a separate legal personality. Section 9 of the Company’s Act provides that: _(1) A company shall, upon its incorporation, be a person in its own right,**separate from its shareholders** , and shall continue in existence until its is removed from the register of companies in accordance with this Act._ _(2) Subject to this Act and its articles of incorporation, a company shall have the capacity, rights, powers and privileges of a national person and may do anything which it is permitted or required to do by its articles of incorporation or under this Act, including:_ _…(e) the power to enter into contracts, incur liabilities, issue bonds and obligations and secure its obligations with its property;_(emphasis added) [20] It is clear therefore that incorporation gives rise to a distinct juristic person, regardless of the identity or location of shareholders or controllers of a company. [21] As far as domicile is concerned, the case of **Young v Anglo American South Africa Limited & Others** is persuasive.[8] The court of first instance found that the test of central administration is “the place where the company concerned, through its relevant organs according to its own constitutional provision, takes the decisions that are essential for the company’s operations.” The Court found that the board meetings of the company took place in South Africa. It found it irrelevant that the key decision makers were bases outside South Africa and that the parent company guided and heavily influenced the decisions made and therefore that the domicile of the company was South Africa. [22] On appeal, Lord Justice Aikens, confirmed the decision and went further that on the facts none of the evidence indicated that the AASA carried out any function in England. It did all its business in South Africa. The parent based in London’s guiding and even heavy influence on the decisions taken by the board of AASA did not alter the position nor did the fact that the Executive Director of AASA also had a group role. [23] In the same breadth, Advocate Motsie alleges, without any proof that the key decision makers for the Third Respondent are based in China. He argues that this is what shifts the domicile of the Third Respondent from Lesotho to China. However, this argument on its own fails to stand because he has submitted that the company is registered inn Lesotho and its registered office is in Lesotho. It entered into a contract with Applicant in Lesotho, and has its operations in Lesotho. He does not allude to any of the operations of the Third Respondent being carried out in China. Therefore, all the evidence which the Applicant has placed before court, point to the domicile of the Third Respondent being in Lesotho. There are no facts placed before court to support the allegation that Third Respondent is a shell company. Applying the analogy as in the case of **Young v Anglo American SA** therefore, the domicile of the Third Respondent would be Lesotho. [24] The Third Respondent is a Lesotho-incorporated company with a registered office in Maseru and business operations in Lesotho. As such, it is an _incola_ for all intents and purposes, and is subject to the jurisdiction of this Court without the need for attachment of its property. On the pleaded facts, the Third Respondent is not and cannot be classified as a _peregrinus_ , [25] The Applicant's reliance on the foreign character of the First and Second Respondents does not convert the Third Respondent into a _peregrinus_. Foreign control does not override the legal status conferred by incorporation in Lesotho. There are no allegations of fraud, sham arrangements, or misuse of corporate structure that would justify piercing the corporate veil or disregarding the separate legal status of the Third Respondent. The attempt to attach property belonging to the Second Respondent, when the contract and cause of action lie against the Third Respondent, also raises a fundamental jurisdictional flaw. Attachment to found jurisdiction must target property of the party over whom jurisdiction is sought. **CONCLUSION** [26] The Third Respondent is an incola, not a _peregrinus_ , and no attachment is necessary to found jurisdiction over it. Applicant has failed to prove a _prima facie_ cause of action against the First and Second Respondents and therefore there is no justification to attach property which does not belong to the company against which the Applicant has a _prima facie_ cause of action. [27] The Applicant has not established a legal basis for attaching the property of the First and Second Respondents, as the contract giving rise to the dispute was not with those Respondents, and there is no jurisdictional or substantive claim directly against them. [28] The application for attachment of property to found jurisdiction cannot succeed on the reasons canvassed in this judgement. In the result the following order is made. ORDER [29] The application be and is hereby dismissed. **___________________________** **Dr I. Shale J** **Judge of the High Court** For Applicant: Advocate T. Motsie * * * [1] Heads of Arguments para 5 [2] Heads of Arguments para 3 [3] ibid [4] Applicant’s Heads of Argument paras 6 and 9. [5] 1991 (1) SA 482 [6] Heads of arguments paras 18 and 22. [7] [[2023] LSHC 102](/akn/ls/judgment/lshc/2023/102) Comm (20 February 2023) at para 8. [8] [2014] EWCA Civ 1130 #### __Related documents ▲ To the top >