#Zimbabwe ordered to pay US$310 million for taking land belonging to German family, owners of Border Timbers Company
— A Swiss-German family whose farms and forest holdings were seized by Zimbabweans during the government’s “land reform” of the 2000s is owed at least $130 million and perhaps more than $310 million by the country’s government, according to a decision from the International Centre for the Settlement of Investment Disputes made public this week.
In a ruling marked by sweeping assessments of history, politics, power and what could have been for the struggling African country, an ICSID panel said the government of Robert Mugabe bears responsibility for allowing crowds of so-called settlers and war veterans to occupy and seize the von Pezold family’s holdings and terrorize its members, violating investment treaties and international law. The July ruling ordered the country to pay the family at least 1 percent of its GDP, before interest.
The arbitration, whose pleadings and evidence filled some 3,000 pages and included a finding that Zimbabwe’s secret police were ordered to assassinate one of the claimants, acknowledged ugly scars of the country’s decades of colonial domination. But the panel ultimately ruled that laws and constitutional amendments passed by Mugabe and his ZANU-PF party collectively known as fast-track land reform resulted in the illegal and avoidable taking of the von Pezolds’ holdings.
“Oftentimes during these proceedings, members of the tribunal had to remind themselves that their remit was not one of a commission of inquiry into what has been described as ‘the March of History,’ but rather strictly that of an arbitral tribunal mandated to adjudicate a dispute or disputes in accordance with the [ICSID Convention] and applicable law,” the ruling said. “This the tribunal has sought to do.”
Nine of the von Pezolds and one of their companies initiated proceedings against Zimbabwe in 2010, seeking restitution of their lands, compensation and declarations Zimbabwe had violated its bilateral investment treaties with Germany and Switzerland. And in 2013, the award said, the family sought and received a protection order after entering evidence that Zimbabwe’s Central Intelligence Organization planned to kill one of its members.
The country argued that the ICSID lacked jurisdiction, said the von Pezolds’ farms bled the nation of its wealth and didn’t amount to investments, and asserted a necessity defense, saying the state could have been toppled by “the masses of land-hungry Zimbabweans who marched with sticks and stones” if it didn’t authorize the taking of white farmers’ lands after decades of incremental, voluntary land sales. The only alternative to letting the invasions take place would have involved mass bloodshed and civil unrest, the country argued.
“Claimants never contributed anything to Zimbabwe,” Didymus Mutasa, a government minister, was quoted as saying. “They drained our land of its resources to increase their family wealth which was already considerable.”
But the panel held that the von Pezolds were protected under the treaties. Although some degree of racial policy preferences would have been legal, the tribunal said, the Mugabe government did nothing to protect farmers’ lands from illegal seizure because it did not want to upset its base of power, which included many of the war veterans and settlers.
Depending on whether land and business rights are restored to the von Pezolds and their companies, the family is owed at least $132 million and possibly more than $310 million, according to the arbitral ruling. Zimbabwe asked the ICSID to annul the award last November, and proceedings are ongoing, according to the docket.
It wasn’t clear Thursday whether or how the family is pursuing the award from Zimbabwe. Their U.S. lawyer didn’t reply to requests for comment, and lawyers in Zimbabwe and Europe couldn’t be reached late Thursday.
Zimbabwe was represented by Johannes Tomana, Prince Machaya, Fortune Chimbaru, Elizabeth Sumowan, F.C. Maxwell and Sophia C. Tsvakwi of its attorney general’s office, and Philip Kimbrough and Tristan Moreau of Kimbrough & Associes.
The tribunal was led by L. Yves Fortier, with David A.R. Williams and Michael Hwang working as arbitrators.
The case is Bernhard von Pezold et al. v. Republic of Zimbabwe, case number ARB/10/15 before the International Centre for the Settlement of Investment Disputes.
–Editing by Jeremy Barker.