International Investment Dispute Resolution: A Review of the Resolution of Investment Disputes Arising out of the Land Reform Programme in Zimbabwe

• Jurisdiction: South Africa
• Citation: (2009) 21 SA Merc LJ 753
• Pages: 753-772
• Date: 25 May 2019
• Author: Carias T Chokuda
• Published date: 25 May 2019

International Investment Dispute Resolution: A

Review of the Resolution of Investment Disputes

Arising out of the Land Reform Programme in

Zimbabwe

CARIAS T CHOKUDA*

University of Cape Town

1 Introduction

In the late 1990s, the Government of Zimbabwe instituted a programme of

land reform that has given rise to numerous disputes relating to the

expropriation of private investments. There is a cross-border or international

element to the resolution of these investment disputes. For instance, some of

the disputants whose investments were expropriated by the Government

of Zimbabwe are nationals of European states. In addition, some of the

disputes have been adjudicated upon by various national, regional and

international forums such as the courts in Zimbabwe, South Africa and the

Southern African Development Community (SADC) Tribunal as well as

the International Centre for the Settlement of Investment Disputes (ICSID).

The international character of the disputes as well as the different dispute

resolution methods adopted by the parties such as cross-border litigation and

Bilateral Investment Treaty (BIT) arbitration give rise to interesting issues

relating to the jurisdiction of a regional court such as the SADC Tribunal, the

effectiveness and enforceability of foreign judgments and arbitral awards as

well as the compensation payable in respect of expropriated investments in

the context of large-scale expropriations such as the land reform programme

in Zimbabwe.

These issues are important to current and potential international investors in

Southern Africa, given that Zimbabwe,

1

South Africa and Namibia are

pursuing public policies designed to address historical injustices for the

benef‌it of their nationals and that such policies have the potential to spawn

investment disputes. For instance, South Africa has in place the Broad-Based

Black Economic Empowerment (BEE) programme that is meant to facilitate

broad-based black economic empowerment by achieving a substantial change

in the racial composition of ownership and management structures of existing

* LLB Hons (Zimbabwe) Exec MBA (Africa University, Zimbabwe) LLM (UCT). Lecturer,

Department of Commercial Law, University of Cape Town.

1

Apart from its land reform programme, Zimbabwe also recently passed the Indigenisation and

Economic Empowerment Act 14 of 2007, s 3 of which requires the Government to take measures to

ensure that at least 51% of the shares in every public company and any other business is owned by

indigenous Zimbabweans.

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(2009) 21 SA Merc LJ 753

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and new enterprises.

2

South Africa also has a continuing land reform

programme that has given rise to fears that South Africa might follow

Zimbabwe’s example of land reform. Since independence in 1990, Namibia,

like South Africa and Zimbabwe, has also made a land reform programme a

central policy tenet.

3

These policies are likely to give rise to disputes in the

respective countries because of their negative impact on investors’ property

and other human rights such as the right not to have property expropriated

except under due process of law, the right to be fairly compensated for

property expropriated by the state, the right to protection of the law, and the

right not to be unfairly discriminated against.

4

This article discusses the issues cited above by way of a review of three

cases (disputes) arising out of the land reform programme in Zimbabwe: Mike

Campbell (Pvt) Ltd & Others v Republic of Zimbabwe;

5

Von Abo v

Government of the Republic of South Africa & Others;

6

and Bernardus

Henricus Funnekotter & Others v Republic of Zimbabwe.

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The cases were

decided in the SADC Tribunal, the South African High Court, and the ICSID

Arbitral Tribunal respectively. The strengths and weaknesses of the different

dispute resolution techniques adopted by the parties in each case are

highlighted in this article. In the light of what happened in each of the cases it

will be argued that in the context of international investment disputes

resolution, arbitration under the auspices of ICSID is the best way of

resolving disputes rather than litigation in the SADC Tribunal or diplomatic

intervention.

1.2 Background

In November 1997 the Government of Zimbabwe embarked on a land

reform programme in accordance with its Land Acquisition Act 3 of 1992 in

terms of which it compulsorily acquired commercial farm land mainly from

white commercial farmers. This programme was subjected to numerous legal

challenges by both local and foreign investors, as evidenced by the cases

reviewed in this article.

9

These legal challenges threatened to derail the

2

Section 2 of the Broad-Based Black Economic Empowerment Act 53 of 2003.

3

See Namibia’s Agricultural (Commercial) Land ReformAct 6 of 1995.

4

The BEE programme has resulted in a dispute that is pending before ICSID in Piero Foresti, Laura

de Carli & Others v Republic of South Africa (see International Center for Settlement of Investment

Disputes, ICSID Case No. ARB(AF)/07/1, available at http://icsid.worldbank.org/ICSID/FrontServlet).

5

Available as Mike Campbell (Pvt) Ltd and Others v Republic of Zimbabwe (2/2007) [2008] SADCT

2 (28 November 2008) at http://www.saflii.org/sa/cases/SADCT/2008/2.html.

6

2009 (2) SA 526 (T).

7

ICSID Case No. ARB/05/6, available at http://www.arbitration.fr/resources/ICSID-ARB-05-6.pdf.

8

Nyahondo Farm (Pvt) Ltd v Brig. Gen A.W. Tapfumaneyi & Others Supreme Court of Zimbabwe

Civil Appeal No. 176/08.

9

At the time, Zimbabwe’s Constitution contained – it still does, though in amended form – a Bill of

Rights meant to protect the rights of citizens. It provided for, amongst others, the following rights: the

right not to have private property compulsorily acquired without the authority of law (s 16(1) as read

with s 11); the right to the protection of the law (s18 (1) as read with s 11); the right to a fair hearing

and a determination of civil rights or obligations by a court of law (s 18(9) read with s 11); and the right

not to be treated in a discriminatory manner on the grounds of race and colour (s 23(1) read with s 11).

(2009) 21 SA Merc LJ754

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