South Africa's state-owned energy firm to appeal after court rules Oracle does not have to support its software

Eskom disputes results of Big Red audit


South African electric utility Eskom is set to appeal against a court decision that refused to force Oracle to support software used by the firm while a licensing and payment dispute is settled.

In a case that dates back to 2019, Johannesburg High Court dismissed an attempt by Eskom to compel the global software giant to renew support services until April 2022.

The decision leaves the state-owned electricity company reliant on an "interim risk mitigating processes... to reduce the risk of its operations being disrupted."

The company, which serves around 6.2 million direct customers, said it had "assessed the risks in the event of Oracle withdrawing technical services support."

It also said Oracle's services were "quite essential to some of Eskom's crucial operations."

The utility is known and unloved in its home country for its penchant for "load shedding" - planned load reduction by switchoffs in various geographies across South Africa - which it describes as "a controlled option to respond to unplanned events to protect the electricity power system from a total blackout".

Systems supported by Big Red under a five-year agreement signed in 2017 include those for online sales, logging supply faults, managing control grids, and load monitoring.

According to the court application, reported in the South African press, Oracle conducted a software licensing audit of the company in 2019 and concluded it was using more software than it was entitled to.

Oracle first claimed the users had underpaid by around R7.3bn (£370m, $500m), which was disputed by Eskom.

Eskom CEO André de Ruyter reportedly wrote to Oracle describing its claim as a "sharp dispute" and noting that the software firm had subsequently reduced it to R600m (£31m, $41m) and then R400m (£20m, $28m).

Eventually, the amount claimed by Oracle was reduced to just under R400m. As far as Eskom is concerned, the amount due to Oracle is approximately R166m in total.

"The regional and national offices appear to believe that by flexing Oracle's muscles, they are displaying strength. This is not how disputes of this nature ought to be resolved," de Ruyter reportedly said.

In a statement following the court ruling, the company said it offered to pay the R166m and proposed a verification and court process in order to end the dispute.

"When Oracle rejected this approach, threatening to terminate its services to Eskom, Eskom approached the high court to compel Oracle to continue providing the technical support services for the duration of the agreement until April 2022," Eskom said.

Since the court dismissed the application, the company said it planned to launch an application for leave to appeal.

"Eskom finds regrettable the manner in which Oracle has handled the matter, and would like to assure the people of South Africa that as an entity dealing with public funds, Eskom will pursue all legal avenues and will not be bullied into paying any monies outside of the legal processes," the company said.

Oracle has been approached by The Register for comment. ®

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