Foreign investors continue to chase US$50m arbitration award

Law360 — Zimbabwe can’t leverage sovereign immunity to get out of paying a US$50 million arbitration award over a soured joint mining venture, two Mauritian mining companies told the D.C. Circuit, saying that a trial court judge was right to permit their enforcement suit to move forward.

Amaplat Mauritius Ltd. and Amari Nickel Holdings Zimbabwe Ltd. said that Zimbabwe’s chief mining commissioner and state-owned mining corporation “impliedly waived” immunity from being haled into court abroad when they decided to arbitrate the mining dispute under the New York Convention.

And because the Zimbabwe Mining Development Corp., or ZMDC, is an “alter ego” of Zimbabwe, that means the southern African country also relinquished immunity from suit in the United States, the brief said.

“Zimbabwe’s meddling in everyday operations at ZMDC, disregard for corporate boundaries when it comes to ZMDC’s management and assets, and efforts to transfer assets to new entities to evade ZMDC’s creditors all are classic types of conduct that warrant treating a state and its state-owned entity as one and the same,” the brief said.

Amaplat and Amari are seeking the enforcement of a 2019 ruling from a court in Zambia that confirmed the US$50 million award in question. That award had been issued to the companies by an International Chamber of Commerce tribunal in early 2014 after ZMDC sought in 2010 to terminate the nickel and platinum mining deals it had inked with Amaplat and Amari, citing “a corrupt relationship which unduly influenced the signing of the [agreements].”

The ICC tribunal concluded the corruption allegations were “not well-founded” and ordered the ZMDC to pay US$42.9 million to Amaplat and US$3.9 million to Amari, plus an additional $3.1 million in costs and expenses. Zambia’s high court confirmed the award in 2019, and the companies later moved to secure the D.C. federal court’s recognition of the judgment in January 2022.

Amaplat and Amari’s attorney, Steven K. Davidson of Steptoe LLP, told Law360 that the companies “intend to pursue all lawful measures, in the United States and elsewhere, to collect on the judgment they have obtained and to collect that sum, plus interest, from all of the defendants, including Zimbabwe.”

Zimbabwe, on the other hand, wants the D.C. Circuit to undo the trial court’s refusal to toss the case.

The nation argued in its June opening brief that U.S. District Judge Christopher R. Cooper leaned “almost exclusively” on the Second Circuit’s 1993 decision in Seetransport Wiking v. Navimpex Centrala , which dealt with the enforcement of an arbitral award.

The Seetransport case, however, said nothing about enforcing a foreign court judgment like the one obtained by Amaplat and Amari, Zimbabwe said.

The investors countered Thursday that such a distinction does not matter.

“Seetransport’s principle … is that what matters is that the sovereign could foresee the courts of Convention jurisdictions being involved with enforcing the award — not the particular procedure employed by a particular court in a particular country,” the brief said.

And in any event, the companies said that a “more obvious exception” to Zimbabwe’s sovereign immunity is on the table: the arbitration exception to the Foreign Sovereign Immunities Act.

“This action falls within the literal terms of the exception: the relief sought is to ‘confirm an award,'” the brief said.

And although the action “employs a different procedure” by seeking recognition of a Zambian judgment, the companies said that “the relief sought is precisely the same.”

Counsel to the Zimbabwe defendants did not immediately return a request for comment Friday.

Amaplat Mauritius Ltd. and Amari Nickel Holdings Zimbabwe Ltd. are 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 Ministry of Mines are represented by Quinn Smith and Katherine A. Sanoja of GST LLP.

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