Zimbabwe Loses Appeal In US$124 Million Border Timbers Case
The UK Court of Appeal dismissed an appeal by Zimbabwe and Spain to set aside the International Centre for Settlement of Investment Disputes (ICSID) awards, each worth over $100 million.
As reported by NewsDay, in January, the UK courts dismissed Zimbabwe’s application to set aside an October 2021 order.
The award, rendered on July 28, 2015, required Zimbabwe to reinstate properties to Border Timbers, pay $29.3 million, or, in default, pay $124 million, plus $1 million in moral damages.
On October 22, 2024, the Court of Appeal handed down its judgment in the joint appeals.
The central issue was whether the ICSID Convention or the Arbitration Act 1966 deprived foreign States of immunity under the State Immunity Act 1978.
The respondents in the appeals were investors in Spain and Zimbabwe, who obtained ex parte orders registering those awards.
Zimbabwe and Spain argued they were immune from the Court’s jurisdiction, while award creditors argued that immunity was displaced by statutory exceptions.
The Court of Appeal rejected the arguments by both first instance judges and decided that ICSID awards may not be opposed on grounds of State immunity.
The Court also rejected several other arguments by the investor parties but did not address Spain’s case regarding the arbitration agreement.
Zimbabwe’s non-immunity defences to enforcement have been remitted to the Commercial Court.
Zimbabwe indicated it would oppose the enforcement of the ICSID award on further grounds if it lost its challenge on State immunity. Part of the judgment reads:
It is suggested that these would come within the class of exceptional matters which were recognised in Micula as remaining open by reason of the award being treated like any other final judgment.
It, therefore, seems that such grounds have not been adjudicated upon, remain at large, and therefore Zimbabwe is right to say that its application to set aside the registration order should not have been dismissed but should have been the subject of further directions. I say nothing about the merit of the non-immunity defences.
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