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Border Timbers Limited & Anor v Republic of Zimbabwe

[2024] EWHC 58 (Comm)
Zimbabwe lost a court case in the UK trying to avoid paying a $124 million debt. The UK court ruled that Zimbabwe had to pay because the rules for international awards meant the UK court didn't need to consider immunity at this stage of the proceedings, even though Zimbabwe tried to claim immunity.

Key Facts

  • Border Timbers Ltd and Hangani Development Co. (Claimants) obtained a US$124 million ICSID arbitration award against the Republic of Zimbabwe (Defendant) for alleged land expropriation.
  • Zimbabwe's application to annul the award was dismissed.
  • Claimants registered the award as a UK judgment under the Arbitration (International Investment Disputes) Act 1966.
  • Zimbabwe applied to set aside the UK judgment, claiming state immunity under the State Immunity Act 1978.
  • Preliminary issues regarding state immunity and waiver were determined.

Legal Principles

State immunity from UK jurisdiction is the default position, except as provided in the State Immunity Act 1978.

State Immunity Act 1978, section 1(1)

A state is not immune from proceedings if it has submitted to the jurisdiction of UK courts.

State Immunity Act 1978, section 2

A state is not immune from proceedings relating to an arbitration if it agreed in writing to submit the dispute to arbitration.

State Immunity Act 1978, section 9

Waiver of state immunity must be express or unequivocally implied from conduct.

R v Bow Street Magistrates, ex parte Pinochet (no. 3)

International treaties are interpreted according to Articles 31-33 of the Vienna Convention on the Law of Treaties 1969.

Vienna Convention on the Law of Treaties 1969, Articles 31-33

The ICSID Convention requires states to recognize and enforce awards as if they were final judgments.

ICSID Convention, Articles 53-55

Full and frank disclosure is required in without-notice applications.

CPR Part 62.21

Outcomes

Zimbabwe's application to set aside the UK judgment was dismissed.

While Articles 53-55 of the ICSID Convention constitute a general waiver of immunity regarding recognition and enforcement, they do not constitute a submission to the jurisdiction of the English courts under section 2 of the State Immunity Act 1978. Further, the court found that the question of sovereign immunity does not arise at all in relation to an application to register an ICSID award because it's a ministerial act, not an act of adjudication against the state. The failure to make full and frank disclosure regarding state immunity was deemed immaterial given the court's finding.

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