Masvingo—The ghost of Zimbabwe’s fast track land reform programme has come back to haunt the government after losing a US$125 million lawsuit against the German-owned Border Timbers Limited company.
The ruling, which was handed down in England last Friday, will see Zimbabwe’s assets in the United Kingdom go under the hammer should the government refuse or fail to pay the money.
During the land reform programme that started in 2000 and displaced more than 4,000 white farmers, the government of Zimbabwe compulsorily seized farms and property owned by Border Timbers Ltd in violation of the Bilateral Investment Promotion and Protection Agreement between Zimbabwe and Germany in 1995.
In terms of the agreement, farms owned by Germans were protected from seizure under Zimbabwe’s land reform programme.
This contractual breach led to Border Timbers approaching the International Centre for Settlement of Investment Disputes (ICSID) in 2010 to seek redress.
Border Timbers was looking to get a settlement of US$345 million but the ICSID granted a US$125 million back in 2015.
Zimbabwe applied to get the arbitral award annulled by ICSID through a procedure provided for by the ICSID Convention. The application was dismissed in 2018.
The government failed to make any payment and in 2021, Border Timbers successfully applied to the High Court in England to register the arbitration award so that it could be recognized and enforced in the same way as a High Court order in England.
The practical effect of the registration is that assets belonging to the government of Zimbabwe can be seized and sold in execution to pay the US$125 million owed to Border Timbers Ltd.
Upon being served with the registration order, Zimbabwe applied to the High Court in England in July 2022 to try and set aside the registration order on the grounds that Zimbabwe was immune from the jurisdiction of UK courts by virtue of England’s State Immunity Act.
Zimbabwe’s application was dismissed by the English High Court on January 19, 2024.
The government of Zimbabwe maintains it still has legal options on the table over the dispute.
“Having said that the court still went on to grant us leave to appeal, something which we are still considering because we were still within time to appeal with that so there is no victory to record. Saying so is a misrepresentation of the facts,” said Attorney General Virginia Mabhiza.
The Zimbabwean government is yet to compensate thousands of displaced former commercial farmers for improvements on designated farms from which they were evicted.