Zimbabwe continues fight in US courts to block payment of US$277m land reform suit

The Zimbabwe Mail | 1st June 2023

By New Zimbabwe

ZIMBABWE continues its fight in the United States (US) to block enforcement of a US$277 million arbitration award to a German and Swiss family which stems from the country’s controversial land reform programme.

The violent so-called fast-track programme was aimed at righting historical injustices in the distribution of prime agricultural land in the country.

The Zanu-PF-led government has ruled out paying dispossessed farmers for the land, committing only to compensate for “improvements” made to agricultural properties rather than for the land itself.

Before their three estates were seized in 2005, the von Pezold family owned roughly 175,000 acres that included the country’s largest tobacco operation as well as land dedicated to cattle farming, a eucalyptus plantation and a pine tree farm along with other agricultural pursuits.

Last week Harare’s legal representatives, Quinn Smith, Katherine Sanoja and Bethel Kassa of GST LLP, urged a Washington D.C. federal judge to toss as premature a bid by the von Pezold family to enforce payment of the award.

Lawyers argued that the family’s motion for judgement on pleadings was improper and should be denied because Zimbabwe had not yet been given the chance to file its defence against the enforcement action.

Further, Harare also has a pending motion to dismiss the case, on grounds that United States (US) courts lack authority to oversee the dispute.

Zimbabwe filed its motion to dismiss the case in March, two months before the von Pezold family asked the court to issue a judgement on the pleadings, according to court records.

The country’s dismissal motion argues Harare has immunity because U.S. courts lack subject-matter and personal jurisdiction to hear the dispute.

Before the fast-track land reform programme which was enacted in 2001, the von Pezold family owned three estates in Zimbabwe comprising tens of thousands of acres, including the country’s largest tobacco growing and curing operation.

The family initiated arbitration in 2010 under the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, also known as the ICSID Convention, claiming Zimbabwe’s land reforms violated two treaties the country had signed with Germany and Switzerland.

In 2015, a ICSID tribunal issued the $277 million award in the family’s favour, finding Zimbabwe had expropriated the von Pezolds’ property and breached international law through the land reform programme.

The family filed the current D.C. federal court enforcement action in July 2021 after Zimbabwe’s continued failure to pay the reward, according to court documents.

After an initial stumble that required the family to reserve its complaint on Zimbabwe, litigation picked up at full steam in January.

The von Pezold family filed their motion for judgement on the pleadings in May, asking the court to grant their motion if it denies Zimbabwe’s motion to dismiss based on jurisdiction. Alternatively, the family asked the court to set a briefing schedule for summary judgement motions.

However, last Tuesday, Zimbabwe accused the family of trying to increase its litigation burden and costs by filing a premature judgement motion and requesting, alternatively, an order setting out a summary judgement briefing schedule.

Harare argued that the court couldn’t grant the family’s motion for judgement on the pleadings even if it did find it had jurisdiction to hear the dispute because pleadings have not concluded in the case. Zimbabwe hasn’t had the chance to file an answer or establish its defences.

“Rendering a decision on a motion for summary judgement before a final determination of Zimbabwe’s immunity objections would go against the [Foreign Sovereign Immunities Act’s] objective to protect a foreign sovereign from defending a suit before its immunity objection is finally settled,” said the country’s attorneys.

The Harare government reached a US$3 billion deal to compensate more than 4,000 white former landowners for improvements on the land but treasury has struggled to raise financing for the scheme.