Border Timbers Limited, Border Timbers International (Private) Limited, and Hangani Development Co. (Private) Limited v. Republic of Zimbabwe

Case summary

At a glance

Parties: Border Timbers Limited, Border Timbers International (Private) Limited and Hangani Development Co. (Private) Limited v. Republic of Zimbabwe
Case no.: ICSID Case No. ARB/10/25 (heard together with, but not consolidated with, Bernhard von Pezold and others v. Zimbabwe, ICSID Case No. ARB/10/15)
Forum and rules: ICSID Convention arbitration; ICSID Arbitration Rules; annulment under Article 52; enforcement proceedings in the United States District Court for the District of Columbia and the English courts
Treaty: Switzerland–Zimbabwe BIT (Article 10(2))
Tribunal: L. Yves Fortier (President), David A.R. Williams, Michael Hwang (who replaced An Chen; An Chen had replaced Peter Mutharika)
Committee: Veijo Heiskanen (President), Jean Kalicki, Azzedine Kettani
Sector: Forestry; timber plantations; land reform
Outcome: The Award of 28 July 2015 ordered Zimbabwe to restore the claimed properties and pay compensation. According to the US court, an ad hoc committee rejected annulment on 21 November 2018. Enforcement in the US and England was still pending in the published documents.
Amount: Awarded (as described by the English Court of Appeal): reinstatement of the properties and payment of US$29,263,498 or, in default of reinstatement, US$124,041,223; in either case a further US$1m in moral damages.

The dispute

Border Timbers Limited and Hangani Development Co. (Private) Limited are companies incorporated in Zimbabwe. They held the Border Estate, a forest plantation estate in the Chimanimani region of south-eastern Zimbabwe. The claimants alleged that Zimbabwe expropriated their properties under its Land Reform and Resettlement Programme, including through the 2005 Constitutional Amendment, and tolerated settler invasions. They relied on Zimbabwe's consent to ICSID arbitration in Article 10(2) of the Switzerland–Zimbabwe BIT. Zimbabwe raised late objections to jurisdiction, including that the investments were indirect, not foreign-owned and not made in accordance with Zimbabwean law or with the required approvals. It also pleaded defences of necessity, the minimum standard of treatment, the Calvo doctrine and its ability to pay.

Key holdings

The Award, rendered on 28 July 2015, requires Zimbabwe to reinstate the properties to the claimants and pay US$29,263,498, or, in default of reinstatement, US$124,041,223. In either event Zimbabwe must pay a further US$1m in moral damages. Court of Appeal judgment ¶ 4
The ad hoc Committee lifted the provisional stay of enforcement. A stay is not presumed: the applicant must show circumstances that require it. Zimbabwe had not shown irreparable harm specific to lifting the stay, and it had confirmed it would pay if annulment failed. Strained public finances alone do not justify a stay. Decision on Stay ¶¶ 80–87
A provisional stay takes effect from the date the ICSID Secretariat receives the complete annulment application (here 23 October 2015), not from the date of registration. The 90-day restitution window under ¶ 1012.1 of the Award had therefore not closed. The Committee reinstated the full window from the date the decision was dispatched and ordered that funds and title documents be placed in escrow. Decision on Stay ¶¶ 94–99
The Tribunals ordered Zimbabwe to take all necessary measures to protect the life and safety of the claimants, in particular Heinrich von Pezold and his family. They found sufficient prima facie evidence that instructions to kill him had been issued to Zimbabwe's Central Intelligence Organisation. PO No. 5 ¶¶ 61–65
The Tribunals refused an amicus curiae petition by the ECCHR and four indigenous communities. There were legitimate doubts about the petitioners' independence. The proposed submissions on indigenous peoples' rights fell outside the scope of the dispute. The petitioners also failed the criteria of Rule 37(2). PO No. 2 ¶¶ 56–64
The US District Court denied Zimbabwe's motions to dismiss. The FSIA arbitration and waiver exceptions confer jurisdiction over petitions to enforce ICSID awards. The BIT enforcement provision is a choice-of-law clause, not a forum-selection clause, and forum non conveniens does not apply. Memorandum Opinion (9 August 2023) ¶¶ 11–16
The Court of Appeal held that Article 54 of the ICSID Convention is a prior written submission to the jurisdiction under section 2(2) of the State Immunity Act 1978. Zimbabwe therefore cannot oppose registration of the Award on grounds of state immunity. The appeal was dismissed, but Zimbabwe's set-aside application was remitted to the Commercial Court for directions on its non-immunity defences. Court of Appeal judgment ¶¶ 96, 103, 110

Procedural history

26 June 2012Procedural Order No. 2: the Tribunals deny the amicus curiae petition of the ECCHR and four indigenous communities.
11 January 2013Procedural Order No. 3: Zimbabwe's late jurisdictional objections and new defences are admitted and joined to the merits; the February 2013 hearing is vacated.
3 April 2013Procedural Order No. 5: provisional measures to protect the life and safety of the claimants, in particular Heinrich von Pezold.
28 October – 2 November 2013Hearing on jurisdiction, liability and quantum in Washington, D.C.
28 July 2015Award: Zimbabwe is ordered to reinstate the properties and pay compensation, with a higher amount payable if restitution is not made.
21 October 2015Zimbabwe applies for annulment and a stay of enforcement; ICSID registers the application on 2 November 2015, and the ad hoc Committee is constituted on 21 December 2015.
24 April 2017Decision on Stay of Enforcement: the stay is lifted, the 90-day restitution window is reinstated and an escrow is ordered.
21 November 2018According to the US District Court, the annulment application is rejected.
9 August 2023After finding defective FSIA service on 6 September 2022, the US District Court denies Zimbabwe's motions to dismiss the petition to recognise the Award.
22 October 2024The English Court of Appeal dismisses Zimbabwe's appeal against Dias J's refusal (19 January 2024) to set aside Cockerill J's registration order of 8 October 2021, but remits the non-immunity defences to the Commercial Court.

Tribunal, counsel and experts

Decided by: L. Yves Fortier President
David A. R. Williams Co-arbitrator
An Chen Co-arbitrator (replaced Peter Mutharika, who resigned; resigned on 19 May 2013)
Michael Hwang Co-arbitrator (replaced An Chen)
Veijo Heiskanen Committee president — appointed by the institution
Jean E. Kalicki Committee member — appointed by the institution
Azzedine Kettani Committee member — appointed by the institution
Amit P. Mehta Judge, United States District Court for the District of Columbia
Julian Flaux Judge, Court of Appeal of England and Wales
For the claimant: Steptoe & Johnson LLP · Wiley Rein LLP · Baker & McKenzie
For the respondent: Attorney General's Office, Republic of Zimbabwe · Kimbrough & Associés · Gresham Legal