Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Zimbabwe in international compensation dispute

Zimbabwe in international compensation dispute


According to a report in Global Arbitration Review, Zimbabwe is facing its third claim at the Washington-based International Centre for Settlement of Investment Disputes (ICSID) arising from President Robert Mugabe’s controversial land reform program.

Swiss-controlled forestry company Border Timbers and its subsidiaries, which have operated in Zimbabwe since 1945, are bringing their claims under the Switzerland-Zimbabwe bilateral investment treaty.

The companies have as their majority shareholders members of the Swiss-German von Pezold family, who have been fighting their own claims against the state over the alleged expropriation of their commercial farms and forestry plantations.

This new case, like the cases that have gone before, focuses on the alleged expropriation of land. It also includes claims that foreign exchange was expropriated from the claimants’ bank accounts, and that Zimbabwe failed to take adequate action to prevent illegal squatters from invading the forestry plantations in the east Manicaland province in 2009 and setting fire to some 7,000 hectares of land.

In a report to shareholders in 2009, Border Timbers’ chairman P W T Chipudhla said the fires that broke out on the Charter and Imbeza forestry estates were the worst “to have ever affected the timber industry in Zimbabwe” and had caused “enormous damage”. Before the arbitration notice was served, he said that efforts to remove those who caused the fires are still going on: “We continue to actively work with both the legal system, as well as the relevant authorities to urgently remove illegal squatters.”

Zimbabwe’s treatment of the von Pezolds’ investments has given rise to diplomatic tensions. In June 2010 the German embassy in Harare wrote to the government warning that Germany could withhold foreign aid contributions if the situation got worse.

ICSID registered Border Timbers’ claim on 20 December.

Like previous ICSID claimants against Zimbabwe, Border Timbers has taken counsel from the London office of Steptoe & Johnson, and Wiley Rein in Washington, DC. Zimbabwe has yet to appoint external counsel.

Border Timbers, Border Timbers International, and Hangani Development v Republic of Zimbabwe (ICSID Case No. ARB/10/25)

Counsel to Border Timbers and others

  • Steptoe & Johnson LLP

Partner Matthew Coleman and associates Helen Aldridge, Anthony Rapa and Kevin Williams in London

  • Wiley Rein LLP

Partner Charles Verrill in Washington, DC

 Counsel to Zimbabwe

  • Office of the Attorney General

Attorney General Johannes Tomana in Harare

Zimbabwe has not yet appointed external counsel.



PS: Zimbabwe became a signatory to the ICSID convention in 1991.


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