Zimbabwe wins USA US$50m lawsuit

THE District of Columbia (DC) Circuit on Tuesday overturned a ruling ordering Zimbabwe to face litigation to enforce an 11-yearold US$50 million arbitral award stemming from an ill-fated mining deal, ruling that two exceptions to sovereign immunity were inapplicable and that the court therefore lacks jurisdiction.

A three-judge panel for the appeals court concluded that a Zambian court ruling enforcing the underlying arbitral award to two Mauritian mining companies was too far removed from the arbitration to qualify under the Foreign Sovereign Immunities Act (FSIA)'s arbitration exception, which waives immunity from an action to confirm an arbitral award.

Nor did the case fall under the FSIA's implied waiver exception for jurisdiction, which comes into play when a country waives its immunity by implication.

The mining companies argued that the exception applied here because Zimbabwe signed a treaty governing the recognition and enforcement of arbitral awards, the New York Convention.

But the panel disagreed, noting that the Convention says nothing about foreign judgments after a party has sought enforcement of the award abroad.

Even if the court were to assume that a country intends to waive its immunity in actions to confirm arbitral awards when it signs the New York Convention, that does not mean the country intends to waive immunity in litigation to enforce foreign judgments, the panel wrote.

"Applying either exception here would require us to conflate two distinct concepts - arbitral awards and foreign court judgments. We cannot fit a judgment recognition action into a provision that mentions only award confirmation," according to the opinion.

"Nor can we conclude that defendants intended to waive their immunity by signing a treaty that governs only the recognition and enforcement of arbitral awards, not the court judgments confirming such awards. Because neither exception applies, we lack subject matter jurisdiction over this action."

The dispute relates to joint ventures formed in the late 2000s by the State-owned Zimbabwe Mining Development Corp with Amari Nickel Holdings Zimbabwe Ltd and Amaplat Mauritius Ltd to develop nickel and platinum mines in Zimbabwe.

Zimbabwe attempted to cancel the deals in late 2010, prompting Amari and Amaplat to initiate arbitration before the International Chamber of Commerce in Zambia.

They named ZMDC and the chief mining commissioner of Zimbabwe's Mines ministry as respondents in the proceedings.

A tribunal issued a final award in 2014 finding ZMDC liable in the amount of US$42,9 million to Amaplat and US$3,9 million to Amari, plus interest, costs and expenses, according to the opinion.

Several years later, Amaplat and Amari obtained a judgment from a court in Zambia registering the award pursuant to the New York Convention, an international treaty governing the enforcement of international arbitral awards.

The judgment empowers Amaplat and Amari to enforce the award "in the same manner as a judgment or order" of the Zambian court, according to the opinion.

The two companies filed the present suit in 2022, naming as defendants ZMDC, the commissioner, and - for the first time - the Republic of Zimbabwe itself, the opinion says.

Counsel for Zimbabwe, GST LLP managing partner Quinn Smith, said his clients and the legal team "are pleased with the decision, especially the well-reasoned opinion from the panel".

Counsel for Amaplat and Amari, Steptoe LLP partner Steven K Davidson, said his clients "will continue to use all available legal means to seek to force Zimbabwe to comply with is obligations under law and will continue to seek to compel Zimbabwe to pay the arbitral award rendered against it in 2014".

"Notwithstanding that the award rendered against it was recognised and enforced in Zambia pursuant to the arbitration agreement, Zimbabwe has disregarded its obligations and has continued to flout domestic and international law by non-payment," he added, noting that the award was enforced last month in Canada.

Davidson said they were considering appealing the ruling to the US Supreme Court.

He noted that the Second Circuit has previously decided the same issue against the sovereign.

US Circuit judges Gregory G Katsas, J Michelle Childs and Senior Circuit judge Harry T Edwards sat on the panel for the DC Circuit. Amaplat and Amari were represented by Steven K Davidson, Robert W Mockler and Joseph M Sanderson of Steptoe LLP.

ZMDC, Zimbabwe and the chief mining commissioner for the Zimbabwe Mines ministry were represented by Quinn Smith and Katherine A Sanoja of GST LLP.

The case is Amaplat Mauritius Ltd et al vs Zimbabwe Mining Development Corp et al, case number 24-7030, in the US Court of Appeals for the District of Columbia Circuit.