Zimbabwe says US$50M mining award can’t be enforced

LAW360 – The Republic of Zimbabwe wants the D.C. Circuit to overturn a ruling forcing it to face litigation to enforce a decade-old US$50 million arbitral award stemming from a soured mining deal, arguing that a lower court mistakenly rejected its sovereign immunity defense.

The country argued in a brief submitted to the appeals court recently that U.S. District Judge Christopher R. Cooper improperly relied on a treaty governing international arbitral awards — the New York Convention — in his analysis, even though the litigation looks to enforce a Zambian court ruling enforcing the award.

Notably, the litigation doesn’t ask the court to enforce the award itself, and Zimbabwe was not a party to the underlying agreement or the arbitration, according to the brief.

“Zimbabwe is not trying to avoid an ‘award-enforcement action’ because appellees are trying to enforce a judgment, not an award,” the country said. “And to the extent Zimbabwe contemplated anything in relation to the United States, it would have never presumed to waive immunity from an award older than three years. The United States has made clear, since 1970, that awards governed by the New York Convention and more than three years old have no grounds for enforcement in this country.”

The country argued that Judge Cooper incorrectly relied on the Second Circuit’s 1993 decision in Seetransport Wiking v. Navimpex Centrala , which dealt with the enforcement of an arbitral award.

“Seetransport incorrectly presumed that ratifying the New York Convention implies a waiver of immunity from enforcing an arbitral award. But this says nothing about judgments,” the country said.

Counsel for the parties could not immediately be reached for comment. The companies that won the award are Amaplat Mauritius Ltd. and Amari Nickel Holdings Zimbabwe Ltd., a Mauritius subsidiary of international resource investment company Amari Resources International.

In the first ruling at issue in the appeal, Judge Cooper in March 2023 granted the republic’s motion to dismiss but ruled that the chief mining commissioner of the Zimbabwean Ministry of Mines would have to face the suit. In the second ruling being challenged, issued some 11 months later, Judge Cooper refused to toss the companies’ amended complaint and ordered Zimbabwe to face the case.

In that second opinion, the judge concluded that Amaplat and Amari had established an alter ego relationship between the republic and the Zimbabwe Mining Development Corp., another defendant in the case.

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 the state-owned Zimbabwe Mining Development Corp., or ZMDC, sought in 2010 to terminate the deals it had inked with Amaplat and Amari, citing “a corrupt relationship which unduly influenced the signing of the [agreements].”

In the underlying arbitration, the ICC tribunal concluded the corruption allegations — centering on efforts by an Amari entity to coordinate the purchase and transportation of Italian tiles and toys for ZMDC’s then-CEO Dominic Mubayiwa before one of the contracts was signed — were “not well-founded.”

ZMDC had inked a deal with Amari Nickel Holdings in 2008 to create a joint venture called Zimari Nickel (Pvt.) Ltd., which would prospect for nickel and develop a mine. A month later, ZMDC inked a similar deal with Amaplat Mauritius to create a joint venture called Zimari Platinum (Pvt.) Ltd.

Zimbabwe attempted to cancel the deals in late 2010, prompting Amari and Amaplat to initiate arbitration before the ICC in Zambia.

Zimbabwe’s appointed arbitrator resigned while the arbitration was ongoing, and the country refused to appoint a replacement. The republic dropped out of the arbitration altogether in 2013.

The tribunal issued its award in early 2014, concluding it had jurisdiction to continue despite Zimbabwe’s boycott of the proceedings. The arbitrators rejected arguments that Zimbabwean officials had not approved the deals with Amari and Amaplat, finding that Zimbabwe had not established any improprieties in the way the deals were struck.

The tribunal found Mubayiwa paid for the tiles and toys at issue, and the alleged corrupt act took place long after one of the deals at issue had already been inked.

It ordered Zimbabwe to pay US$42.88 million to Amaplat, US$3.9 million to Amari and to reimburse the companies US$3.1 million in costs and expenses.

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 R. 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