In a groundbreaking decision, the English High Court dismissed Zimbabwe’s attempt to invoke state immunity as grounds for setting aside a $124 million arbitration award over land. Mrs Justice Dias, in the case of Border Timbers Limited & Anor v Republic of Zimbabwe, asserted that state immunity is irrelevant in the context of registration applications, emphasizing the UK’s commitment to international obligations.
Zimbabwe faced a setback in the English courts as it sought to overturn a $124 million arbitration award related to land expropriation. Mrs Justice Dias firmly rejected Zimbabwe’s claim of state immunity, emphasizing that such immunity holds no weight in registration applications. The judge’s innovative approach upholds the UK’s international obligations, particularly under the 1965 Washington Convention on the Settlement of Investment Disputes. The $124 million award, coupled with interest and additional damages, was originally granted in 2015 under the ICSID, concerning the alleged expropriation of land owned by Border Timbers Limited and Hangani Development Co. (Private) Limited.
Despite Zimbabwe’s efforts to annul the award through the ICSID convention, the English court granted registration and entry of judgment. The judge asserted the finality and binding nature of the award, emphasizing that the English court cannot review the merits or jurisdiction of the tribunal. Notably, ICSID operates as a self-contained regime, allowing challenges only through the annulment process within the convention.
In the realm of ICSID award registration, the state is not implicated until the registration order is served. Mrs Justice Dias clarified that sovereign immunity does not apply to ICSID award registration, barring Zimbabwe from seeking to set it aside on that basis. However, the country retains the right to claim immunity during subsequent steps toward execution.
In a noteworthy development, the judge highlighted that the claimants faced cost penalties for a breach of duty, albeit unintentional, due to incomplete disclosure.
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