A federal judge in the United States has rejected Zimbabwe’s bid to avoid paying around $440.3 million in compensation to a European family due to the country’s controversial land reforms. The compensation was awarded by the International Centre for Settlement of Investment Disputes (ICSID) in response to Zimbabwe’s land seizures, which aimed to address colonial-era land grabs.
The court ruling allows two separate lawsuits to proceed. In one case, a German and Swiss family is seeking to enforce a $276.1 million award, while in the other case, two corporations previously controlled by the same family are seeking to realise a $164.2 million compensation award.
Zimbabwe argued that U.S. courts lacked jurisdiction and that the cases should be heard within its own borders based on bilateral investment treaties. However, Zimbabwe’s arguments were unsuccessful as US District Judge, Amit P. Mehta, criticised their misinterpretation of bilateral treaties and confusing positions. Mehta said the Foreign Sovereign Immunities Act (FSIA) doesn’t protect countries from enforcement lawsuits over arbitral awards.
The judge added that the fact that the arbitration took place under Zimbabwe’s treaties with Germany and Switzerland doesn’t require enforcement within the country. The ICSID ruled in favour of the von Pezold family, finding illegal expropriation of their estates and two Zimbabwe-based companies. The von Pezold family owned extensive land holdings, including a tobacco operation and other agricultural ventures, before the Zimbabwe government seized their properties.
The land seizures, which occurred from 2000 to 2001, led to the displacement of more than 4,000 white farmers and have been widely criticised for causing Zimbabwe’s economic decline and strained relations with Western countries. Critics attribute Zimbabwe’s economic troubles and strained relations to the land seizures during the Mugabe era. Under President Emmerson Mnangagwa, a separate compensation scheme has been introduced for the affected white farmers. However, the scheme does not involve returning their farms but offers approximately $3.5 billion for what is described as improvements on the land.