Overview
Steptoe’s success for the von Pezold family against the Government of Zimbabwe before a tribunal of the World Bank’s arbitration body, the International Centre for Settlement of Investment Disputes (ICSID), has received broad media coverage, with articles published in Global Arbitration Review, Investment Arbitration Reporter, Law360, and The Times.
On July 28, the ICSID tribunals ordered Zimbabwe to return within 90 days all of the property that it expropriated from the von Pezold family, failing which Zimbabwe must pay the clients US$196 million in financial damages. A similar award was made in favor of the companies in the second arbitration against Zimbabwe, the financial damages portion of which was US$125 million. Moral damages were also awarded in both cases to compensate the clients for the assaults and threats of violence they endured throughout their investment in Zimbabwe. In addition, Zimbabwe was ordered to pay all of the clients’ costs in both cases. The sums are among the largest ever awarded in an investor-state arbitration.
The cases arose out of Zimbabwe’s expropriation of the client’s property pursuant to Zimbabwe’s Land Reform Program, and the manipulation of fixed exchange rates whereby the clients were forced to exchange foreign currency for Zimbabwean dollars at a rate which grossly overstated the real value of the Zimbabwean dollar. The tribunals accepted the clients’ claims that Zimbabwe’s measures breached the German-Zimbabwe and Switzerland-Zimbabwe bilateral investment treaties, and rejected all of Zimbabwe’s defenses and 15 challenges to jurisdiction and admissibility. The cases were hard fought (at one point the tribunals issued an order prohibiting Zimbabwe from killing one of the clients).
The London-based Steptoe team consisted of Matthew Coleman, Helen Aldridge, and Tom Innes, and Washington-based Anthony Rapa.
The full articles can be read at Global Arbitration Review, Investment Arbitration Reporter, Law360, and The Times. (subscriptions required).
