UK High Court rules Zimbabwe cannot escape paying $125m award; similar setbacks in US courts

UK High Court rules Zimbabwe cannot escape paying $125m award; similar setbacks in US courts

By Agencies

UK: England’s High Court has nixed the Republic of Zimbabwe’s bid to set aside an order enforcing a $125 million arbitral award against it, finding the country’s argument that it was immune from the jurisdiction of the English courts was “irrelevant.”

Judge Julia Dias ruled on Friday that Border Timbers Ltd. and Hangani Development Co. (Private) Ltd. were entitled to apply to register their July 2015 arbitration award against Zimbabwe through the High Court as per international convention.

The companies were “merely exercising a statutory entitlement” and recognizing the status of their award, rather than seeking direct relief against the southern African nation, Judge Dias wrote.

Zimbabwe’s claim to have state immunity — which provides foreign states with protection against legal proceedings brought before the courts of other jurisdictions — does not apply to the court order because it does not involve the jurisdiction of the English court being invoked against a foreign state, according to the judgment.

However, Judge Dias noted Zimbabwe can rely on state immunity to resist attempts by Border Timbers and Hanganis Development to go beyond registering their award in the future.

Zimbabwe was held liable for a total of $440 million in July 2015 after the International Centre for Settlement of Investment Disputes granted compensation for the impact of a 1990s land reform program that attempted to return the southern African nation to its indigenous people.

In one case, members of a German and Swiss family are seeking to enforce a $276.1 million award they received from the ICSID after losing tens of thousands of acres in Zimbabwe’s land-reform program.

Zimbabwean forestry and sawmilling company Border Timbers and Hangani Development were granted the other $124 million of this award plus $1 million in “moral damages and costs” relating to Zimbabwe allegedly dispossessing their property, according to the filing.

The award was not paid, and in September 2021 the companies applied to register the award in the English court, the judgment says. This application was granted the next month by Judge Sara Cockerill, who ordered the award to be recognized as a High Court judgment, it added.

Zimbabwe is simultaneously attempting to escape liability for the arbitration awards through the U.S. courts.

In August, U.S. District Judge Amit P. Mehta ruled that enforcing the awards was appropriate for U.S. court, even though the petitioners aren’t American.

Zimbabwe’s appeal against this decision is proceeding after Border Timbers and Hangani Development failed to shut down what they argued was a “frivolous” appeal and an “obvious delay tactic.”

The companies’ enforcement efforts in the U.S. will be put on hold until Zimbabwe’s D.C. Circuit appeal concludes, according to an October order of the D.C. federal court.

Parties did not immediately respond to requests for comment on Monday.