Bonifacio brothers win court battle against Lombard Insurance over $6 million Kusile dispute

Jorge and Sergio Bonifacio have defeated Lombard Insurance’s attempt to sequestrate them over a R100 million ($6 million) indemnity liability linked to construction work at Eskom’s Kusile Power Plant, after the Johannesburg High Court ruled that the judgment underpinning the insurer’s execution efforts was not a money judgment.

Acting Judge Snyckers dismissed both sequestration applications on November 3, 2026, finding that Lombard could not rely on writs of execution issued against the brothers to establish acts of insolvency under South Africa’s Insolvency Act. The insurer was also ordered to pay costs on scale C.

Bonifacio brothers’ liability stems from Kusile guarantees

The dispute originated from performance guarantees issued by Lombard for Technology and Construction Projects (TCP), a subcontractor involved in the Kusile power plant project. TCP and the Bonifacio brothers provided indemnities to protect the insurer against losses if the guarantees were called.

DBT, the principal beneficiary of the guarantees, subsequently demanded approximately R128 million from Lombard Insurance, a South African specialist short-term insurer. The insurer initially resisted payment, alleging that DBT had fraudulently called the guarantees despite knowing that takeover certificates had reduced TCP’s outstanding obligations.

Lombard eventually settled the dispute with DBT for R100 million, with the settlement made an order of court. It then sought to recover the amount from the Bonifacio brothers under their indemnity agreements.

Court upholds distinction between liability and payment order

In September 2020, the High Court, in a judgment delivered by Strydom J, declared the brothers jointly and severally liable to indemnify Lombard for R100 million, together with interest at two percentage points above Absa Bank’s prime overdraft rate from January 15, 2020, until payment. The Supreme Court of Appeal dismissed their subsequent appeal in February 2026.

Lombard later obtained writs of execution but struggled to serve them at the brothers’ recorded addresses in Bedfordview. It argued that their failure to satisfy the judgment and the sheriff’s unsuccessful service attempts amounted to acts of insolvency warranting sequestration.

The brothers challenged the writs, arguing that the 2020 order merely declared their liability to indemnify Lombard and did not direct them to pay a specific sum. Snyckers agreed, finding that the order was declaratory and could not be converted into an executable money judgment.

Bonifacio brothers avoid sequestration as court rejects insolvency claims

The court also rejected Lombard’s reliance on the sheriff’s unsuccessful attempts to serve the writs as proof that the brothers were avoiding payment. An act of insolvency may arise where a judgment remains unsatisfied after a sheriff’s demand or where the sheriff establishes that the debtor lacks sufficient disposable property. However, the judge observed that the brothers had never been asked to identify assets available to satisfy the judgment.

Relying on the precedent in Sachs v Katz, the court concluded that writs extending beyond the authority of the underlying judgment could not establish an act of insolvency.

With neither alleged act established, the court dismissed both sequestration applications with costs.

The ruling does not extinguish the brothers’ R100 million indemnity liability, which was upheld by the Supreme Court of Appeal. Instead, it prevents Lombard from using the declaratory order and the writs issued under it as grounds for sequestration, leaving the underlying claim intact while denying the insurer the relief it sought.