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Avocats, autres représentants, expert(s), secrétaire du tribunal

Award

Glossary of Terms
2005 Constitutional Amendment Constitution of Zimbabwe Amendment (No. 17) Act 2005 (CLEX-19).
2013 Constitution Constitution of Zimbabwe (Draft 17 July 2012) (CLEX-331).
ACAC Accumulated Current Actual Cost.
Adam The youngest child of Elisabeth and Rüdiger von Pezold, Adam Friedrich Carl Leopold Franz Severln von Pezold.
Additional Claims Claims raised by the von Pezold Claimants in the Claimants’ Reply relating to water rights and permits.
Adult Children Claimants The children of Elisabeth and Rüdiger von Pezold, excluding their youngest child, Adam. 1. Anna Eleonore Elisabeth Webber (née von Pezold), 2. Heinrich Bernd Alexander Josef von Pezold, 3. Maria Juliane Andrea Christiane Katharlna Batthàny (née von Pezold), 4. Georg Philipp Marcel Johann Lukas von Pezold, 5. Felix Alard Moritz Hermann Kilian von Pezold and 6. Johann Friedrich Georg Ludwig von Pezold.
ASEAN Agreement The 1987 ASEAN Agreement.
BITS A collective term for the German BIT and Swiss BIT.
Border Border Timbers Limited.
Border Claimants The Claimants in ICSID Case No. ARB/10/25, being 1. Border Timbers Limited; 2. Timber Products International (Private) Limited (formerly Border Timbers International (Private) Limited); and 3. Hangani Development Co. (Private) Limited.
Border Companies The companies incorporated under the laws of the Republic of Zimbabwe within the Border Estate, I.e. the Border Claimants, namely: 1. Border Timbers Limited; 2. Timber Products International (Private) Limited (formerly Border Timbers International (Private) Limited); and 3. Hangani Development Co. (Private) Limited
Border Estate The Border Estate Includes five sub-estates or plantations, which comprise 28 properties (the Border Properties). There are three sawmills on the Border Properties: the Tilbury Estate Sawmill, the Sheba Estate Sawmill and the Charter Estate Sawmill. The Border Estate also includes two non-plantation properties on which are located a pole treatment plant and two factories (the Paulington factory and the BTI factory).
Border International Timber Products International (Private) Limited (formerly Border Timbers International (Private) Limited).
Border Properties The 28 properties that comprise the Border Estate plantations, and which are included in the Claimants’ Memorial, Table 6, as updated in the Claimants’ Reply, Annex 2.
Border Shares The combined share capital of the Border Companies.
CIO Central Intelligence Organisation of the Republic of Zimbabwe.
Claimants Reference to the "Claimants", for purposes of the present Award, without further specification, is a reference to both the von Pezold Claimants of Case No. ARB/10/15 and the Border Claimants of Case No. ARB/10/25.
Claimants’ Properties A collective term for the Zimbabwean Properties and the Residual Properties.
Constitution The Constitution of Zimbabwe, originally published as a Schedule to the Zimbabwe Constitution Order 1979 (SI 1979/1600 of the United Kingdom).
DRC Depreciated Replacement Cost.
ECCHR European Centre for Constitution and Human Rights.

ECHR European Court of Human Rights.
Elisabeth Elisabeth Regina Maria Gabriele von Pezold.
Estates A collective term for the Forrester Estate, Border Estate and Makandi Estate.
FET Fair and Equitable Treatment.
FIC Foreign Investment Committee of the Republic of Zimbabwe.
FMV Fair Market Value.
Forrester Companies The companies incorporated under the laws of the Republic of Zimbabwe within the Forrester Estate, namely 1. Forrester Holdings (Private) Limited; 2. Forrester Estate (Private) Limited; and 3. Forrester Silk (Private) Limited.
Forrester Estate A tobacco growing and curing operation comprising ten properties.
Forrester Loans Loans extended to the Zimbabwean Companies or otherwise to investments in Zimbabwe by Elisabeth between 1994 and 1998.
Forrester Properties The ten properties that comprise the Forrester Estate, and which are listed in the Claimants’ Memorial, Table 1.
Forrester Shares The combined share capital of the Forrester Companies.
FPS Full Protection and Security.
FTP Free Transfer of Payments.
FTLRP Fast Track Land Reform Programme, a phase during the Land Reform Programme.
German BIT The bilateral investment treaty between the Republic of Zimbabwe and the Federal Republic of Germany signed on 29 September 1995 (CLEX-3).
German Protocol The protocol to the German BIT signed on 29 September 1996 (CLEX-3).
ha Hectares.
Hangani Hangani Development Co. (Private) Limited.
Hearing Joint hearing on jurisdiction, liability and quantum held at the World Bank Headquarters in Washington, D.C. from 28 October to 2 November 2013 for ICSID Case Nos. ARB/10/15 and ARB/10/25.
ICSID International Centre for Settlement of Investment Disputes.
ICSID Arbitration Rules Rules of Procedure for Arbitration Proceedings (April 2006).
ICSID Convention Convention on the Settlement of Investment Disputes between States and Nationals of Other States.
ILC Articles International Law Commission’s Articles on Responsibility of States for Internationally Wrongful Acts (2001) UN Doc A/56/10.
IMF International Monetary Fund.
Income-Generating Assets The income-generating assets on the Residual Properties.
Joint First Session Joint first session for ICSID Case Nos. ARB/10/15 and ARB/10/25 held on 7 February 2011.
Land Acquisition Act Land Acquisition Act 1992.
LRP Land Reform Programme.
Main Claims Claims raised by the von Pezold Claimants and the Border Claimants in the Claimants’ Memorial.
Makandi Companies The companies incorporated under the laws of the Republic of Zimbabwe within the Makandi Estate, namely 1. Makandi Tea and Coffee Estates (Private) Limited; 2. Large Scale Investments (Private) Limited; 3. Chipinge Holdings (Private) Limited; 4. Coffee Estates (Private) Limited; and 5. Rusitu Valley Development Company (Private) Limited.
Makandi Estate A mixed plantation, growing coffee, bananas, maize, macadamia nuts, avocados and timber, comprising nine properties.

Makandi Properties The nine properties that comprise the Makandi Estate, and which are listed in the Claimants’ Memorial, Table 10.
MDC Movement for Democratic Change (a Zimbabwean political party).
MFN Most-Favoured Nation.
NAFTA North American Free Trade Agreement.
NSV Net Standing Value.
Parent Claimants 1. Bernhard Friedrich Arnd Rüdiger von Pezold; and 2. Elisabeth Regina Maria Gabriele von Pezold.
Parties Reference to the "Parties", for purposes of the present Award, without further specification, is a reference to both the von Pezold Claimants of Case No. ARB/10/15, the Border Claimants of Case No. ARB/10/25, and the Republic of Zimbabwe, being the Respondent in both cases.
PCIJ Permanent Court of International Justice.
Petitioners The ECCHR and four indigenous communities of Zimbabwe, who had sought leave to participate as amicus curiae in these proceedings.
Residual Properties The Border, Makandi and Forrester properties which were not directly affected by the 2005 Constitutional Amendment, which are however now said to be worthless because they are not viable on their own (defined infurther detail in the Award).
Respondent The Republic of Zimbabwe, also referred to as the Government.
Rudiger Bernhard Friedrich Arnd Rüdiger von Pezold.
Section 5 Notice Notice of proposed acquisition under Section 5 of the Land Acquisition Act 1992.
Section 8 Order A statutory order issued pursuant to the Land Acquisition Act 1992, vesting title to property that had been subject to a Section 5 Notice in the State of Zimbabwe.
Settlers/War Veterans The persons who settled on privately owned commercial land in Zimbabwe. As used by the Claimants, the term also refers to persons claiming to be "War Veterans" and other persons who had been promised, or expected, the provision of land by the Respondent pursuant to the Land Reform and Resettlement Programme.
Swiss BIT The bilateral investment treaty between the Republic of Zimbabwe and the Swiss Confederation signed on 15 August 1996 (CLEX-5).
Swiss Family Claimants The von Pezold Claimants, save for Rüdiger
UN The United Nations.
von Pezold Claimants The Parent Claimants, the Adult Children Claimants and Adam von Pezold, i.e.: 1. Bernhard Friedrich Arnd Rüdiger von Pezold; 2. Elisabeth Regina Maria Gabriele von Pezold; 3. Anna Eleonore Elisabeth Webber (née von Pezold); 4. Heinrich Bernd Alexander Josef von Pezold; 5. Maria Juliane Andrea Christiane Katharina Batthàny (née von Pezold); 6. Georg Philipp Marcel Johann Lukas von Pezold; 7. Felix Alard Moritz Hermann Kilian von Pezold; 8. Johann Friedrich Georg Ludwig von Pezold; 9. and Adam Friedrich Carl Leopold Franz Severin von Pezold
Water Permits The 20-year permits relating to the use of public water for agricultural purposes, which in January 2000 replaced the previous Water Rights pursuant to the Water Act 1998.
Water Rights The rights created by the Water Act 1976 relating to the use of public water for agricultural purposes, later converted in January 2000 into Water Permits pursuant to the Water Act 1998.
ZANU-PF Zimbabwe African National Union - Patriotic Front (a Zimbabwean political party).
ZIA Zimbabwe Investment Authority.
ZIC Same as for ZIA: the Zimbabwe Investment Authority.

Zimbabwean Companies A collective term for the Forrester, Border and Makandi Companies.
Zimbabwean Company Shares The combined share capital of the Zimbabwean Companies.
Zimbabwean Note Note from the Zimbabwean Minister of Finance to the Ambassador of the Federal Republic of Germany dated 18 September 1996 (CLEX-3).
Zimbabwean Properties The Border, Makandi and Forrester properties directly affected by the 2005 Constitutional Amendment (defined in further detail in the Award).1

I Introduction

1.
The present Award settles disputes that have arisen between the von Pezold Claimants, defined below, and the Republic of Zimbabwe ("Zimbabwe" or the "Respondent") and that have been submitted to arbitration pursuant to the dispute settlement provisions of the bilateral investment treaties entered Into between the Federal Republic of Germany and Zimbabwe on 29 September 1995 (the "German BIT") and between the Swiss Confederation and Zimbabwe on 15 August 1996 (the "Swiss BIT"), respectively.
2.
This case is, at its heart, a land dispute, but one with deep context and history. As will be seen, although the dispute, the subject of this arbitration, relates primarily to the alleged expropriation in the 21st century by Zimbabwe of land and other property held by the von Pezold Claimants further to its Land Reform Programme ("LRP"), It can only be fully understood If one casts one’s mind back to the colonial era of the 20th century, when Zimbabwe was known as Southern Rhodesia.
3.
Following Zimbabwe’s Independence and the election of Robert Mugabe as President in 1980, the land policies of the Rhodesian era which favored the white minority population were reversed and replaced with land policies favouring the black Indigenous population. Those policies, accompanied by the Invasions of private land by settlers, feature prominently in this arbitration.
4.
Oftentimes during these proceedings, members of the Tribunal had to remind themselves that their remit was not one of a commission of Inquiry Into what has been described as "the March of History", but rather strictly that of an Arbitral Tribunal mandated to adjudicate a dispute or disputes inaccordance with the Convention of the International Centre for Settlement of Investment Disputes ("ICSID") and applicable law. This, the Tribunal has sought to do.

II The Conjoined Proceedings

5.
As will be seen later2, two Identically composed Tribunals were constituted to hear disputes intwo separate arbitrations: ICSID Case No. ARB/10/15 and ICSID Case No. ARB/10/25. During the Joint First Session of the two Tribunals on 7 February 2011, the Parties to ICSID Case No. ARB/10/15 and ICSID Case No. ARB/10/25 agreed that these cases would be heard together, although they would not be formally consolidated, and that the two Tribunals would render two separate Awards in relation to each case.
6.
In fact, during nearly four years of proceedings, the two cases were heard together and the Parties submitted joint pleadings and evidence, the Respondent in particular rarely specifying which arguments or submissions related to the von Pezold Claimants or to the Border Claimants, as defined below.
7.
As a result of these unique conjoined and intertwined proceedings, each Tribunal now renders a separate Award which contains not only the decision of each Tribunal on every question submitted to it, together with the reasons upon which each decision is based, but also the decision of the other Tribunal on every question submitted to it, together with the reasons upon which those decisions are based.
8.
A detailed procedural history of these cases, setting out the basis for the Tribunal’s approach to the preparation of the present Award, as well as the conduct of the proceedings, follows.

III Procedure

A. The Registration of the Requests for Arbitration

(1) The von Pezold Arbitration

9.
On 11 June 2010, ICSID received a Request for Arbitration from Bernhard Friedrich Arnd Rüdiger von Pezold ("Rudiger") and Elisabeth Regina Maria Gabriele von Pezold ("Elisabeth") (together, the "Parent Claimants") and their children, Anna Eleonore Elisabeth Webber (née von Pezold), Heinrich Bernd Alexander Josef von Pezold, Maria Juliane Andrea Christiane Katharina Batthàny (née von Pezold), Georg Philipp Marcel Johann Lukas von Pezold, Felix Alard Moritz Hermann Kilian von Pezold, Johann Friedrich Georg Ludwig von Pezold (together the "Adult Children Claimants") and Adam Friedrich Carl Leopold Franz Severin von Pezold ("Adam") (collectively, the "von Pezold Claimants").
10.
Save for Rüdiger, who is German and claims only under the German BIT, all of the von Pezold Claimants are both German and Swiss nationals, and therefore advance their claims under both the German BIT and the Swiss BIT.
11.
The Secretary-General of ICSID registered the von Pezold Request for Arbitration on 8 July 2010. The case was assigned ICSID Case No. ARB/10/15.

(2) The Border Arbitration

12.
On 3 December 2010, ICSID received a Request for Arbitration from Border Timbers Limited ("Border"), Timber Products International (Private) Limited3("Border International") and Hangani Development Co. (Private) Limited ("Hangani") (collectively, the "Border Claimants"), invoking the ICSID arbitration provisions of the Swiss BIT. The Border Claimants are all companies Incorporated in Zimbabwe, but claim Swiss nationality through their collective alleged control by the von Pezold Claimants.
13.
On 10 December 2010, the Border Claimants supplemented their Request for Arbitration, in response to an Inquiry by ICSID. The Secretary-General of ICSID registered the Border Request for Arbitration, as supplemented, on 20 December 2010. The case was assigned ICSID Case No. ARB/10/25.
14.
Reference to the "Claimants", for purposes of the present Award, without further specification, is a reference to both the von Pezold Claimants of Case No. ARB/10/15 and the Border Claimants of Case No. ARB/10/25. Similarly, reference to the "Parties", for purposes of the present Award, without further specification, refers to both the von Pezold Claimants of Case No. ARB/10/15, the Border Claimants of Case No. ARB/10/25, and the Republic of Zimbabwe.

B. Constitution of the two Tribunals

15.
As agreed by the Parties, the Tribunal in ICSID Case No. ARB/10/15 was to consist of three arbitrators, one appointed by each Party and the President of the Tribunal to be appointed by the two co-arbitrators. The Tribunal was constituted on 9 December 2010 in accordance with Article 37(2)(a) of the ICSID Convention and the ICSID 2006 Arbitration Rules. It was composed of The Hon. L. Yves Fortier, P.C., C.C., Q.C. (a national of Canada), appointed by agreement of the coarbitrators to serve as President, Professor David A.R. Williams, Q.C. (a national of New Zealand), appointed by the von Pezold Claimants, and Professor A. Peter Mutharika (a national of Malawi), appointed by the Respondent. Mr. Marco Tulio Montañés-Rumayor was appointed as Secretary of the Tribunal. Ms. Frauke Nitschke replaced Mr. Montañés-Rumayor as Secretary of the Tribunal on 25 January 2011.
16.
By letters of 28 December 2010 and 3 January 2011, the Parties agreed that the Tribunal in the Border Arbitration, ICSID Case No. ARB/10/25, was to consist of three arbitrators, one appointed by each Party and the third, presiding arbitrator, appointed by agreement of the Parties. The Parties further agreed that the composition of the Tribunal in ICSID Case No. ARB/10/25 was to be Identical to the one constituted in ICSID Case No. ARB/10/15. The Tribunal in the Border Arbitration was constituted on 20 January 2011 in accordance with Article 37(2)(a) of the ICSID Convention and the ICSID Arbitration Rules. On the same day, Ms. Frauke Nitschke was appointed as Secretary to the two Tribunals.

C. The Joint First Session and Hearing the Cases Together

17.
In accordance with ICSID Arbitration Rule 13(1), a first session was held on 7 February 2011 in London, England. Pursuant to an agreement by the Parties, the first session was held as a joint first session for ICSID Case Nos. ARB/10/15 and ARB/10/25 (the "Joint First Session").
18.
The Joint First Session considered matters listed on a provisional agenda circulated by the Secretary of the two Tribunals on 25 January 2011. The Claimants submitted their positions regarding the items on the provisional agenda in writing on 4 February 2011. No written response to the provisional agenda was received from the Respondent prior to the Joint First Session.
19.
The Joint First Session was attended in person by the three Members of the two Tribunals, the Secretary to the Tribunals, and Messrs. Matthew Coleman, Kevin Williams, Anthony Rapa and Ms. Helen Aldridge of Steptoe & Johnson, and Mr. Charles O. Verrill, Jr. of Wiley Rein LLP. As agreed by the Parties, the Respondent’s representatives, Advocate Prince Machaya, and Mmes. Sophia Christina Tsvakwi, Fatima Chakupamambo Maxwell, and Elizabeth Sumowah, participated by video-conference from Harare, Zimbabwe.
20.
In their letter of 4 February 2011, and at the Joint First Session, the Claimants confirmed that the two Tribunals were properly constituted, and that they did not have any objection to the appointment of any member of the two Tribunals. During the Joint First Session, the Respondent also confirmed that the two Tribunals were properly constituted, and that it did not have any objection to the appointment of any member of the two Tribunals.
22.
During the Joint First Session, as reflected in the Summary Minutes of the Joint First Session of the two Arbitral Tribunals4 the Parties further agreed inter alia to follow the procedural approach for the two cases as proposed by the Claimants in their letter of 4 February 2011 :

22.1 Case Bernhard von Pezold & Ors v The Republic of Zimbabwe ICSID Case No. ARB/10/15, and case Border Timbers Limited & Ors v The Republic of Zimbabwe ICSID Case No. ARB/10/25 shall be heard together (but not formally consolidated).

22.2 The Claimants will submit joint pleadings, but will separately address those issues within a pleading where circumstances distinct to particular Claimants and/or case necessitate separate treatment.

22.3 Each witness statement and expert report shall state whether it applies to one case or the other case.

22.4 The Tribunal shall issue separate awards in relation to each case but may nevertheless discuss these arbitrations in any award or procedural order as a single set of proceedings, except where circumstances distinct to particular Claimants necessitate separate treatment.

23.
This latter agreement of the Parties was confirmed by the Tribunals in their Procedural Order No. 13 issued on 23 December 20145.

D. Reconstitution of the two Tribunals

24.
On 6 June 2011, ICSID notified the Parties that Professor A. Peter Mutharika had submitted his resignation as arbitrator in both ICSID Case Nos. ARB/10/15 and ARB/10/25, and that the two proceedings were suspended in accordance with ICSID Arbitration Rule 10(2) until the vacancies resulting from Professor Mutharika’s resignation had been filled. On 1 July 2011, ICSID notified the Parties pursuant to ICSID Arbitration Rule 8(2) that the Tribunals had consented to Professor Mutharika’s resignations in the two proceedings and that, inaccordance with ICSID Arbitration Rule 11(1), the vacancy on the Tribunals resulting from Professor Mutharika’s resignation shall be promptly filled by the same method by which Professor Mutharika’s appointments had been made.
25.
By letter of 13 July 2011, the Respondent appointed Mr. Rajsoomer Lallah as arbitrator in the two proceedings. By letter of 25 July 2011, ICSID notified the Parties that Mr. Lallah was unavailable to accept the appointments and invited the Respondent to proceed to appoint another arbitrator in these two proceedings. On 12 August 2011, the Respondent appointed Professor An Chen, a national of the People’s Republic of China, as arbitrator in the two proceedings, and Professor Chen subsequently accepted his appointments. The two Tribunals were reconstituted on 15 September 2011, and the proceedings resumed pursuant to ICSID Arbitration Rule 12.
26.
On 19 May 2013, ICSID notified the Parties pursuant to ICSID Arbitration Rule 10(1) that Professor An Chen had submitted his resignation as arbitrator in these two proceedings. The proceedings were subsequently suspended in accordance with ICSID Arbitration Rule 10(2). The two Tribunals consented to Professor Chen’s resignation on 20 May 2013 pursuant to ICSID Arbitration Rule 8(2), and the Respondent was invited to appoint an arbitrator to each of the two Tribunals.
27.
On 1 July 2013, the Respondent appointed Mr. Michael Hwang, a national of Singapore, to fill the vacancy on the two Tribunals. Mr. Hwang subsequently accepted his appointments. The two Tribunals were reconstituted on 3 July 2013, and the proceedings resumed pursuant to ICSID Arbitration Rule 12.

E. Written and Oral Procedure

28.
During the Joint First Session held on 7 February 2011, the Respondent had stated that it did not intend to file any objections to jurisdiction, and that it agreed with the timetable proposed by the Claimants in their letter of 4 February 2011, which consisted of a schedule for two rounds of written pleadings on the merits (Involving the filing of a Memorial, a Counter-Memorial, a Reply and a Rejoinder), to be followed by an oral procedure on the merits. As discussed below, the Respondent did, in fact, raise objections to jurisdiction.
29.
Accordingly, following the Joint First Session, the procedural calendar for the written and oral procedure was amended multiple times, either following an agreement by the Parties, or as directed by the Tribunal.

(1) The Written Procedure

a) The Parties’ principal written pleadings

30.
The Parties’ principal written pleadings, as contemplated by the Parties’ original agreement to two rounds of written pleadings, are listed at numbers 1-4 in the table below. As discussed in more detail in the context of Procedural Order No. 3, dated 11 January 2013, and contrary to the indication made during the Joint First Session, the Respondent filed objections to jurisdiction in its Rejoinder. In light of the Tribunal’s ruling in Procedural Order No. 3, which admitted into the record those objections pleaded by the Respondent In its Rejoinder, and subsequent directions from the Tribunal, the Parties filed further written submissions. The Parties’ further written submissions are listed at numbers 5-25, which are also set out below:

No. Pleading Party Date Abbreviation
1. Memorial on the Merits Claimants 15 November 2011 Mem.
2. Counter-Memorial on the Merits Respondent 11 August 2012 CM
3. Reply on the Merits and Ancillary Claims Claimants 12 October 2012 Reply

No. Pleading Party Date Abbreviation
4. Rejoinder on the Merits, including Objections to Jurisdiction to the Claimants’ Original Claim & Observations on Ancillary Claims Respondent 14 December 2012 Rejoinder
5. Observations on the Rejoinder and a Response to Observations on Ancillary Claims Claimants 1 March 2012 Surrejoinder
6. Response to Observations on the Rejoinder Respondent 19 April 2013 Rebutter
7. Updated Request for Relief Claimants 15 May 2013
8. Corrected Quantum Claimants 15 May 2013
9. Re-Rebutter (i.e., addendum to the Respondent’s 19 April 2013 Submission) Respondent 15 August 2013 Re-Rebutter
10. Response to Re-Rebutter (i.e. observations on the Respondent’s submission of 15 August 2013) Claimants 9 September 2013 Re-Rebutter Response
11. Observations on the Claimants’ Updated Request for Relief Respondent 9 September 2013
12. Updated Quantum Reply Respondent 9 September 2013
13. Reply to Response to Re-Rebutter (i.e., response to the Claimants’ submission of 9 September 2013) Respondent 26 September 2013 Re-Rebutter Reply
14. Response to the Respondent’s submission of 9 September 2013 Claimants 26 September 2013 Claimants’ 9 September Response
15. Skeleton Argument Claimants 14 October 2013 Cl. Skel.
16. Skeleton Argument Respondent 14 October 2013 Resp. Skel.
17. Post-Hearing Brief Claimants 7 May 2014 Cl. PHB
18. Post-Hearing Brief Respondent 7 May 2014 Resp. PHB
19. Statement on inadmissible Material Contained in Post-Hearing Brief Claimants 6 June 2014 Statement on Inadmissible Material

No. Pleading Party Date Abbreviation
20. Response to Statement on Inadmissible Material Respondent 2 July 2014 Response to Statement on Inadmissible Material
21. Reply to Response to Statement on Inadmissible Material Claimants 9 July 2014 Reply to Response to Statement on Inadmissible Material
22. Claimants’ Submission on Costs and Confirmation of Separate Awards Claimants 1 December 2014 Cl. Costs Submission
23. Respondent’s Submission on Costs and Fees Respondent 1 December 2014 Resp. Costs Submission
24. Claimants’ Comments on Respondent’s Costs Submission of 1 December 2014 Claimants 18 December 2014 Cl. Reply Costs Submission
25. Respondent’s Reply to Claimants’ Submission on Costs and Fees Respondent 18 December 2014 Resp. Reply Costs Submission

31.
The voluminous nature of the Parties’ pleadings and evidence cannot be overstated. The Parties have filed approximately 3,000 pages of pleadings alone. The motion practice in these two cases has also been extensive, adding hundreds of additional pages to these arbitrations in procedural orders and directions and contributing to the overall lengthening of the procedure.

b) Instruments issued by the Tribunal in the course of the proceedings

(i) Procedural Order No. 1

32.
Procedural Order No. 16, dated 31 October 2011, related to document production and disposed of certain outstanding requests for documents made by the Claimants.

(ii) President’s Directions of 13 June 2012

33.
On 12 June 2012, the Claimants brought an urgent application for provisional measures pursuant to ICSID Arbitration Rule 39 relating to a request for disclosure of documents made outside of the procedure agreed between the Parties and recorded in the Minutes of the Joint First Session.
34.
On 13 June 2012, the President of the Tribunal issued directions concerning the Claimants’ 12 June 2012 application pursuant to para. 5.3 of the Summary Minutes of the Joint First Session, including, inter alia, a proposed briefing schedule.
35.
On 20 June 2012, the Respondent Indicated that it did not see a need to file any observations in this matter and undertook that any future requests for disclosure would comply with the disclosure regime ordered by the Tribunal at the Joint First Session. The Claimants filed observations on the Respondent’s 20 June 2012 letter on the same day expressing some residual concern. The Tribunal considered, however, that, in view of the Respondent’s undertaking, the Claimants’ application had become moot.

(iii) Procedural Order No. 2

36.
Procedural Order No. 2, dated 26 June 20127, disposed of a petition by the European Centre for Constitution and Human Rights ("ECCHR") and four Indigenous communities of Zimbabwe for leave to participate as amicus curiae ("Petitioners"). Specifically, the ECCHR and the indigenous communities petitioned the Tribunal (i) for permission to file a written submission as joint amici curiae-, (ii) for access to the key arbitration documents; and (iii) for permission to attend the oral hearings and to reply to any specific questions of the Tribunal on the written submissions.
37.
The Claimants opposed the petition on several substantive grounds and noted that the Parties had agreed during the Joint First Session that no non-disputing party submissions would be made. The Claimants therefore took the position that the Tribunal had no residual discretion under Article 44 of the ICSID Convention to admit any such submissions into the record. The Respondent advised that, while the Parties had agreed that ICSID Arbitration Rule 37(2) would not apply to these proceedings, it had not anticipated that there could be any person or organisation with an Interest in the matter apart from the Parties. The Respondent further stated that it had no objection to the Petitioners being allowed to file written submissions provided they fell within the scope of ICSID Arbitration Rule 37(2) and did not impinge on or amount to a challenge to the sovereignty and territorial Integrity of Zimbabwe.
38.
The Tribunal denied the petition in Its entirety. The Tribunal held that it had the discretion, upon consulting with the Parties, to allow a non-disputing party to file a written submission pursuant to ICSID Arbitration Rule 37(2), provided that certain minimum criteria were met. In this case, the Tribunal considered that the circumstances of the petition gave rise to legitimate doubts as to the independence or neutrality of the Petitioners, and that none of the criteria set out in ICSID Arbitration Rule 37(2) had been satisfied. The Tribunal further considered that, in light of the Tribunal’s conclusions with respect to the application to file a written submission, it was unnecessary for the Tribunal to consider the subsidiary requests for access to documents and to attend the hearings in these proceedings. The Tribunal noted, however, that, pursuant to ICSID Arbitration Rule 32(2), where a party objects to the request of a non-disputing party to attend the hearings in a proceeding, a tribunal has no discretion to grant such a request over that party’s objection, and that, accordingly, the Petitioners’ request to attend the hearings in these proceedings must be denied in any event, as the Claimants had objected thereto.

(iv) Procedural Order No. 3

39.
Procedural Order No. 3, dated 11 January 2013 ("PO No. 3")8, disposed of an urgent application brought by the Claimants on 20 December 2012 in connection with jurisdictional challenges and new defences allegedly pleaded by the Respondent in its Rejoinder, filed with the Tribunal on 14 December 2012. The Claimants sought an order that the alleged jurisdictional challenges and new defences, insofar as they related to the Claimants’ case as pleaded in the Memorial, were inadmissible or, alternatively, an order directing (i) that the jurisdictional challenges be joined to the merits of the cases and an additional round of briefing on these and the new defences be scheduled; (ii) that certain documents in support of the Rejoinder be produced; and (iii) that new, mutually acceptable hearing dates be set.
40.
Following two rounds of written submissions by the Parties, the Tribunal admitted the Respondent’s challenges to jurisdiction, certain of which related to ancillary claims raised by the Claimants in their Reply, and others of which related to the Claimants’ case as pleaded in the Memorial, having found "special circumstances" to exist within the meaning of ICSID Arbitration Rule 26(3), and joined all of the challenges to jurisdiction to the merits of the two cases. Among the special circumstances, the Tribunal noted the retention by the Respondent of external counsel, Mr. Philip Kimbrough of Kimbrough &Associés, notified by the Respondent on 14 December 2012.
41.
The Tribunal further vacated the February 2013 hearing dates and, in consultation with the Parties, confirmed new hearing dates from 10 to 14 June 2013 (also preserving a sixth hearing day as per the Parties’ agreement). Finally, the Tribunal ordered the Respondent to provide copies of documents referred to in its Rejoinder and directed a new briefing schedule in connection with the new jurisdictional objections and the Respondent’s comments on the Claimants’ ancillary claims.

(v) Procedural Order No. 4

42.
Procedural Order No. 4, dated 16 March 2013 ("PO No. 4")9, disposed of an urgent application for an order for provisional measures pursuant to Article 47 of the ICSID Convention and ICSID Arbitration Rule 39, which was brought by the Claimants on 6 March 2013. The application related to the appearance of a number of persons on one of the Claimants’ properties in Zimbabwe, and the Claimants requested that the Tribunal "order the Respondent to instruct its police force to prevent people from coming onto the Claimants’ Estate, and to the extent that those people have already arrived on the Claimants’ Estate, to remove them, unless those people are authorised by the Claimants".
43.
Following several written submissions by the Parties, the Tribunal issued PO No. 4, noting the Respondent’s statement that it had instructed its police to maintain the status quo as of the date on which the Claimants had initiated ICSID proceedings, and to ensure that a certain person not interfere with the Claimants’ operations on the said property. The Tribunal also noted the Respondent’s statement that the provincial police had undertaken to act on any reports they received in relation to this matter and the Claimants’ confirmation that the police had progressively taken steps since the date of the Claimants’ application to ensure the removal of the persons in question from the property and that certain food stocks and harvested crops had been restored with the assistance of the police. Inlight of the Respondent’s undertakings, the Tribunal saw no basis to order the relief requested and dismissed the application. The Tribunal noted, however, that it did not take a view on the merits of the application given the factual matrix presented by the Parties, and that its ruling was without prejudice to any further application that either Party might seek to bring should that factual matrix change. Finally, the Tribunal strongly encouraged both Parties to conduct themselves in such a manner as to avoid further aggravation of the dispute between them in order to ensure the orderly progress of the proceedings.

(vi) Procedural Order No. 5

44.
Procedural Order No. 5, dated 3 April 2013 ("PO No. 5")10, disposed of an urgent application brought by the Claimants on 8 March 2013 for an order for provisional measures pursuant to Article 47 of the ICSID Convention and ICSID Arbitration Rule 39, relating to an alleged plan by the Respondent’s Central Intelligence Organisation ("CIO") to kill one of the Claimants, Mr. Heinrich von Pezold.
45.
On 8 March 2013, the President of the Tribunal issued, pursuant to para. 5.3 of the Summary Minutes of the Joint First Session, preliminary directions directing the Respondent to immediately take all necessary measures to protect the life and safety of the Claimants from any harm by any member, organ or agent of the Respondent or any person or entity instructed by the Respondent (the "Protection Measures"), and to allow the Claimants to participate, insofar as it might be possible, in the planning and the implementation of the Protection Measures. The preliminary directions also contained a briefing schedule for the Parties’ written observations.
46.
Following two rounds of written submissions, the Tribunal issued PO No. 5, finding that the Claimants had adduced sufficient prima facie evidence that instructions to kill Mr. Heinrich von Pezold had been issued to the CIO, and found that the measures which the Claimants sought were urgent and necessary, noting that any action of any member, organ or agent of the Respondent or any person or entity Instructed by the Respondent which could endanger the life and safety of the Claimants, in particular the life and safety of Mr. Heinrich von Pezold, was capable of causing irreparable prejudice to their right to participate in the present proceedings. The Tribunal further found that any prejudice caused to the Respondent by issuing an order for provisional measures was far less than the risk to the life and safety of Mr. Heinrich von Pezold.
47.
The Tribunal hence confirmed its interim directions issued on 8 March 2013, and ordered the Respondent to periodically report on the Protection Measures adopted by the Respondent. In summary, the Tribunal directed: (i) that the Respondent immediately take all necessary measures to protect the life and safety of the Claimants and, in particular, Mr. Heinrich von Pezold and his family, from any harm by any member, organ or agent of the Respondent or any person or entity instructed by the Respondent; (ii) that the Respondent allow the Claimants to participate, insofar as it might be possible, in the planning and the implementation of such Protection Measures; and (iii) that the Respondent report in writing to the Trlbunal on the 15th of each subsequent month until the beginning of the hearing scheduled to commence on 10 June 2013, on the status of the Protection Measures adopted.

(vii) Procedural Order No. 6

48.
Procedural Order No. 6, dated 22 July 2013 ("PO No. 6")11, relates to an urgent application for an order for provisional measures pursuant to Article 47 of the ICSID Convention and ICSID Arbitration Rule 39(1), by which the Claimants requested the Tribunal to order the Respondent to instruct its police force to prevent all persons from coming onto certain of the Claimants’ Estates, and to the extent that certain persons had already arrived onto the Estates, to remove them, unless their presence was authorized by the Claimants.
49.
Following written submissions by the Parties, the Tribunal ruled that, on the evidence provided, the Tribunal was not satisfied that the criteria for the grant of provisional measures, in particular those of urgency and necessity, were met, and that, in light of the factual situation presented, the broad relief requested by the Claimants was required. The Tribunal dismissed the application without prejudice to any future application that they might wish to bring should the factual circumstances change, and reiterated their strong encouragement of the Parties to conduct themselves in a manner so as to avoid further aggravation of the disputes between them.

(viii) Procedural Order No. 7

50.
Procedural Order No. 7, dated 8 August 2013 ("PO No. 7")12, disposed of an application by the Claimants relating to (i) a new jurisdictional objection allegedly pleaded by the Respondent for the first time in its pleading filed on 19 April 2013 (the "Rebutter" listed in the table above); and (ii) "new" evidence filed insupport thereof and insupport also of a prior jurisdictional objection raised in the Respondent’s Rejoinder. The Claimants subsequently amended this application by agreeing to the admission of the "new" evidence for a limited purpose, and sought a further written procedure to respond to that evidence.
51.
Following several written submissions by the Parties, the Tribunal decided to dismiss the Claimants’ objections, and directed an additional pleading schedule forthe Parties with regard to certain of the Respondent’s objections.

(ix) Procedural Order No. 8

52.
On 25 September 2013, the Tribunal Issued Procedural Order No. 8 ("PO No. 8")13, disposing of a "procedural request" brought by the Respondent on 22 September 2013 in connection with its submission due on 23 September 2013, further to the supplemental briefing schedule directed by the Tribunal in PO No. 7. Inessence, the Respondent requested an extension of the page limit of its submission, arguing that the Claimants had raised three new arguments in their 9 September 2013 submission.
53.
The Tribunal noted that the Respondent had been afforded ample opportunity to present its case and to defend the Claimants’ claims. The Tribunal recalled PO No. 3, by which all of the Respondent’s challenges to jurisdiction, including those responsive to claims pleaded in the Claimants’ Memorial, pleaded for the first time in the Rejoinder, were admitted. The Tribunal further recalled that, in PO No. 7, the Respondent was allowed to raise additional jurisdictional objections at an even later stage of the proceedings, and was given an opportunity to present those objections cogently in a supplemental pleading to its Rebutter, and was also given a right of reply to the Claimants’ 9 September 2013 submission. The Tribunal also noted that it was not persuaded that it was necessary or appropriate at this stage to reopen the directions set out in PO No. 7 so as to afford the Respondent additional pages to plead its reply to the Claimants’ 9 September 2013 submission. The Tribunal further noted that it was of the view that in so denying the Respondent’s request, the Respondent’s right to be heard was not in any way impinged, noting that the Respondent would, in addition to the opportunities afforded to it to express its views in writing, also have the opportunity to make submissions on both law and evidence in respect of these objections during the oral hearing, and in any post-hearing procedures that might be agreed by the Parties and the Tribunal, or decided by the Tribunal.

(x) Procedural Order No. 9

54.
InProcedural Order No. 9, dated 15 October 2013 ("PO No. 9")14, the Tribunal ruled on the admissibility of the various materials that were the subject of two applications brought by the Respondent on 2 October 2013 and 12 October 2013 respectively. The details of these applications and how they were disposed of by the Tribunal in PO No. 9 are set out in Section VI.F(2) of the present Award.

(xi) Procedural Order No. 10

55.
Procedural Order No. 10, dated 24 February 2014 ("PO No. 10")15, disposed of the Parties’ proposed corrections to the transcripts made at the oral procedure. In PO No. 10, the Tribunal further decided to admit onto the record the post-hearing materials filed by the Respondent in response to questions posed by the Tribunal during the hearing (see below Section III.E.(2)). Finally, PO No. 10 also established the post-hearing procedure, i.e., that the Parties were to file their post-hearing briefs within 60 days from receipt of the corrected hearing transcript, and that either Party could file a brief statement with the Tribunal within 30 days from receipt of the other Party’s post-hearing submission, identifying any material that that Party considered inadmissible in the other Party’s submission. Finally, the Respondent’s request for an extension of time for the filing of its post-hearing submission was denied.

(xii) Procedural Order No. 11

56.
Procedural Order No. 11, dated 15 July 2014 ("PO No. 11 ")16, disposed of the Respondent’s communicated intention to file a reply to the Claimants’ observations to the Respondent’s procedural statement dated 2 July 2014 (the "Respondent’s 2 July Procedural Statement"), and submitted in reply to the Claimants’ procedural statement on inadmissibility. Although not presented with an application by the Respondent to file such a reply, the Tribunal communicated to the Parties by way of PO No. 11 that there was no need for another round of submissions and no special circumstances existed within the meaning of ICSID Arbitration Rule 26(3), to the extent applicable, that would justify allowing the Respondent a further written submission beyond what had been granted to it through the Tribunal’s other procedural orders and directions.

(xiii) Procedural Order No. 12

57.
Procedural Order No. 12, dated 5 September 2014 ("PO No. 12")17, disposed in part of certain procedural requests made by the Respondent in its 2 July Procedural Statement. The Tribunal denied procedural requests (vi), (vii), (viii), (ix) and (x), which related to the alleged "emergence of new evidence" in the form of assertions purportedly made by the Claimants in their 6 June Statement on Inadmissibility, and held in reserve procedural requests (i), (ii), (iii), (iv) and (v) to be disposed of in this Award (see below Section VI.F.(4)).

(xiv) Procedural Order No. 13

58.
As noted earlier, during the Joint First Session of the two Tribunals on 7 February 2011, the Parties agreed that, while the two cases would be heard together, they would not be formally consolidated and each Tribunal would issue a separate award in relation to each case.
59.
In fact, as the Tribunal wrote at the outset of the present Award, during nearly four years of proceedings, the two cases have been heard together and the Parties have abided, most of the time but not always, by their original agreement as reflected in the Minutes of the Joint First Session by submitting joint pleadings and evidence, the Respondent in particular rarely specifying which arguments or submissions related to the von Pezold Claimants or to the Border Claimants.
60.
As a result of this unique situation, on 20 October 2014, the Tribunal invited the Parties to provide their views on whether a single award or two separate awards should be rendered in these conjoined proceedings.
61.
On 1 December 2014, the Claimants confirmed that, in their view, it was "imperative" that separate awards be rendered. They wrote:

Indeed, the issue of separate awards is not only a right in circumstances where there are separate proceedings, but also an imperative in these cases in order to protect the rights of the von Pezold Claimants, i.e. the claimants in ICSID Case No. ARB/10/15. The imperative arises because in the event of a single award, during the enforcement phase cooperation between all of the Claimants would be necessary. Such cooperation is likely to be impossible in the event that the Respondent takes control of the Border Company Claimants, which it may do in order to jeopardise the enforcement of a single award or for other reasons.

62.
The Respondent, on 18 December 2014, requested that a single award be rendered. The Respondent submitted:

The discussion has taken place in a unified manner, without any clear distinction in issues, briefing or oral argument. Even the Exhibits were unified and not distinguished as between cases. The matters are so intertwined that it is appropriate to resolve all issues as a single award.

63.
InProcedural Order No. 13 dated 23 December 2014 ("PO No. 13")18, the Tribunal found that, while the matters in issue in the two proceedings were indeed intertwined, in that they arose from substantially the same events, "from a practical perspective and as a matter of principle", the von Pezold Claimants and the Border Claimants, having filed their claims independently of each other, should also be able to pursue enforcement of any award independently of each other.
64.
Accordingly, the Tribunal confirmed in PO No. 13 that "a separate award shall be rendered for each proceeding in ICSID Case No. ARB/10/15 and ICSID Case No. ARB/10/25".
65.
Nevertheless, the Tribunal recalls that the matters at issue in these two cases arise from substantially the same events and that the Parties, as mentioned earlier, have submitted joint pleadings and evidence.
66.
In the circumstances, as will be seen, the Tribunals render two separate awards which, in many respects, are identical but, where required by the terms of the ICSID Convention and/or by the pleadings of either Party, are case specific.

(2) The Oral Procedure

67.
During the Joint First Session held on 7 February 2011, it was originally agreed that a hearing on liability and quantum was to be held in Washington, D.C. from 28 May to 1 June 2012, with 2 June 2012 in reserve.
68.
Following the resignation of Professor Mutharika, the May/June 2012 hearing dates were vacated. On 27 October 2011, following the reconstitution of the Tribunal with Professor Chen filling the vacancy created by Professor Mutharika’s resignation, the hearing on liability and quantum was rescheduled to take place in Singapore from 18 to 22 February 2013 (with 23 February 2013 in reserve).
69.
As indicated above, these second hearing dates were vacated by the Tribunal in PO No. 3. New hearing dates, also fora hearing in Singapore, were scheduled for 10 to 14 June 2013 (with June 15, 2013 in reserve).
70.
Following the resignation of Professor Chen, the June 2013 hearing dates were also vacated. During a telephone conference of the President of the Tribunal with the Parties on 21 May 2013, new hearing dates were tentatively agreed, subject to the availability of the Respondent’s new party-appointed arbitrator, for 28 October to 1 November 2013 in Washington, D.C. (with 2 November 2013 in reserve). The tentative hearing dates and new hearing venue were confirmed following the reconstitution of the two Tribunals with the addition of Mr. Hwang.
71.
A hearing on jurisdiction, liability and quantum was held at the World Bank Headquarters in Washington, D.C. from 28 October to 2 November 2013 (the "Hearing").
72.
The following persons attended the Hearing on behalf of the Claimants:

Mr. Heinrich von Pezold

Mr. Bernhard (Rüdiger) von Pezold

Mrs. Elisabeth von Pezold

Mr. Matthew Coleman, Steptoe & Johnson

Mr. Kevin Williams, Steptoe & Johnson

Mr. Anthony Rapa, Steptoe & Johnson

Ms. Helen Aldridge, Steptoe & Johnson

Mr. Charles Verrill, Jr., Wiley Rein

Mr. Thomas Innes, Steptoe & Johnson

Ms. June Booth, Steptoe & Johnson

Mr. Kenneth Schofield, Border Timbers Limited

Mr. Gideon Theron, Commercial Farmers’ Union

Mr. Simon van derLingen, Border Timbers Limited

Mr. George Bottger, Border Timbers Limited

Mr. Anthony Levitt, RGL Forensics

Mr. Richard Jenks, RGL Forensics

Ms. Helen Swain, RGL Forensics

Professor Stephen Chan, SOAS University

Mr. Alan Stephenson, Mills Fitchett

Mr. Paul Christopher Paul, Wintertons

Ms. Amanda von Pezold

Ms. Elba Schofield

Attending on behalf of the Respondent were:

The Honourable Douglas T. Mombeshora, Minister of Lands and Rural Resettlement

Mr. Wellington Mvura, Aid to Minister Mombeshora

Ms. Sophia Christina Tsvakwi, Permanent Secretary, Ministry of Lands and Rural Resettlement

Ms. Elizabeth Sumowah, Legal Advisor, Ministry of Lands and Rural Resettlement

Prince Machaya, Deputy Attorney General, Civil Division Attorney General’s Office

Ms. Fortune Chimbaru, Chief Law Officer, Civil Division Attorney General’s Office

Ms. Fatima Maxwell, Judge, Labour Court

Mr. Philip Kimbrough, Kimbrough & Associés

Mr. Tristan Moreau, Kimbrough & Associés

Minister Didymus Mutasa, Minister of State in the Office of the President and Cabinet

Mr. Onias C. Masiiwa, Chief Inspector Exchange Control

Mr. Grasiano Nyaguse, Director, Policy, Planning and Coordination, Ministry of Economic Planning and Development

Mr. Sifelani Moyo, Director, Ministry of Local Government, Public Works and National Housing

Dr. Joseph Kanyekanye, Group CEO, Allied Timbers

H.E. Ambassador Mapuranga Machivenyika, Embassy of the Republic of Zimbabwe in Washington, D.C.

Mr. Whatmore Goora, Embassy of the Republic of Zimbabwe in Washington, D.C.

Mr. Richard Chibuwe, Embassy of the Republic of Zimbabwe in Washington, D.C.

73.
The following fact witnesses were called to testify during the Hearing: for the Claimants - Elisabeth [Tr. Day 2, pp. 417-475]; Mr. Heinrich von Pezold [Tr. Day 2, pp. 475-604]; Mr. Gideon Theron [Tr. Day 3, pp. 621-659]; Rüdiger [Tr. Day 3, pp. 660-705]; Mr. Kenneth Schofield [Tr. Day 3, pp. 706-759]; Mr. Simon van der Ungen [Tr. Day 3, pp. 763-804]; and Mr. George Bottger [Tr. Day 3, pp. 806-829]; for the Respondent - Ms. Sophia Tsvakwi [Tr. Day 4, pp. 1168-1257] and Minister Didymus Mutasa [Tr. Day 5, pp. 1332-1417],
74.
The following expert witnesses were called to testify during the Hearing: for the Claimants - Mr. Paul Paul [Tr. Day 3, pp. 830-902]; Professor Stephen Chan [Tr. Day 3, pp. 902-970]; Mr. Alan Stephenson [Tr. Day 4, pp. 986-1057]; Mr. Anthony Levitt [Tr. Day 4, pp. 1057-1163]; for the Respondent - Mr. Onias Masiiwa [Tr. Day 5, pp. 1275-1332]; Prince Machaya [Tr. Day 5, pp. 1444-1499]; Mr. Grasiano Nyaguse [Tr. Day 5, pp. 1502-1578]; Mr. Sifelani Moyo [Tr. Day 6, pp. 1592-1676]; and Mr. Joesph Kanyekanye [Tr. Day 6, pp. 1687-1871],
75.
Mr. Guy Lafferty, Mr. Juerg Kaempfer, Mr. John Gadzikwa, Mr. Alex Masterson, Mrs. Anna Webber, Mrs. Maria Batthyäny, Mr. Georg von Pezold, Mr. Felix von Pezold, Mr. Johann von Pezold, Mr. Adam von Pezold, Mr. Henrik Olivier, Mr. Duncan Hamilton, Mr. Adrian de Bourbon, Dr. Albrecht Conze and Mr. Nicholas Shaxson submitted fact written evidence and Mr. Charles Laurie, Mr. Arthur Daugherty, Mr. John Robertson, Mr. Jason Ridley, Professor Dan Sarooshi submitted expert reports in support of the Claimants’ case, but were not called to testify at the Hearing. Similarly, Mr. Nixon Kutsaranga, Mr. Upenyu Mavatu, Mr. Richard Patrick Chitondwe, Mr. Lovemore Makunun’unu, Mr. Maxwell Chasakwa, Mr. Rodwell Muzite and Chief Chadworth Ringisai Chikukwa submitted fact written evidence in support of the Respondent’s case but were not called to testify orally.
76.
On 30 October 2013, counsel for the Respondent informed the Tribunal that Minister Didymus Mutasa, whose presence at the Hearing had been requested by the Claimants, was unable to attend the Hearing in-person due to delays in the issuance of a travel visa by the United States Government. Accordingly, arrangements were made for Minister Mutasa to be examined by video-conference from the World Bank’s office in Harare, in the presence of Ms. Joy Berry, staff member at ICSID, and a representative of each Party (see Tr. Day 4, pp. 981-983).

(3) The Post-Hearing Procedure

77.
On 22 November 2013, the Claimants filed their proposed corrections to the Hearing transcript and identified those portions of the transcript which they submitted contain inadmissible evidence and/or submissions. As the Respondent requested, and was granted, an extension of time to file its proposed corrections to the Hearing transcript, the Claimants’ proposed corrections and excisions relating to inadmissible evidence and/or submissions were transmitted to the Tribunal and the Respondent on 29 November 2013, following the Respondent’s filing of its proposed corrections.
78.
On 29 November 2013, the Respondent filed its proposed corrections to the transcript, along with responses to questions raised by the Tribunal during the Hearing, supported by those documents that the Respondent had undertaken to provide following the Hearing relating to Zimbabwean land audits and the travaux préparatoires of the German BIT.
79.
By letter of 2 December 2013, the Tribunal invited the Parties to confer and seek to agree corrections to the transcript that were editorial in nature, advising the Tribunal of any such agreement by 16 December 2013. The Tribunal also invited the Claimants to file any observations they had on the Respondent’s answers to the Tribunal’s questions, which had been posed during the Hearing, regarding land audits and the travaux préparatoires of the German BIT by 23 December 2013. The Tribunal invited the Respondent to file a reply to the Claimants’ observations by 6 January 2014; however, the Respondent elected not to file such reply.
80.
All of the aforementioned post-hearing matters, among others, were resolved by PO No. 10.
81.
On 7 May 2014, the Parties filed post-hearing briefs with the Tribunal19. Inaccordance with PO No. 10, the Claimants filed, on 6 June 2014, their statement regarding material contained in the Respondent’s Post-Hearing Brief which they considered inadmissible.
82.
On 20 October 2014, the Tribunal requested detailed costs submissions, which were duly filed by the Parties on 1 December 2014. The Tribunal also invited the Parties to file a simultaneous round of reply submissions on costs, by 18 December 2014, which were also duly filed.
83.
On 3 February 2015, pursuant to Rule 38(1) of the ICSID Arbitration Rules, the Tribunal declared the proceedings closed in both the von Pezold and the Border arbitrations.
84.
On 2 June 2015, the Tribunal came to the conclusion that it would be unable to draw up and sign the Award(s) by 3 June 2015, being 120 days after closure of the proceedings. Accordingly, pursuant to Rule 46 of the ICSID Arbitration Rules, the Tribunal then extended this period by a further 60 days and so notified the Parties.

F. The BITS

85.
The treaties under which the Claimants advance their claims are the German BIT, signed on 29 September 1995, and which entered into force on 14 April 200020, together with the Protocol to the German BIT which was signed on 29 September 1995 (the "German Protocol"), and the Swiss BIT, signed on 15 August 1996, and which entered into force on 9 February 2001, together with the Protocol to the Swiss BIT which was signed on 15 August 1996.
86.
The Parties’ arbitration agreements are contained in the respective BITs. Article 11 of the German BIT provides as follows in connection with the settlement of disputes arising under the treaty between a Contracting State and an investor of a Contracting State:

Settlement of Investment Disputes between a Contracting Party and an investor of the Other Contracting Party

(1) Disputes between a Contracting Party and a national or company of the other Contracting Party concerning an investment of such national or company in the territory of the former Contracting Party shall as far as possible be settled amicably between the parties concerned.

(2) If the dispute is not settled within six months of the date when it is raised by one of the parties in dispute, it shall, at the request of the national or company concerned, be submitted for arbitration. Each Contracting Party hereby consents to submit the dispute to arbitration. Unless the parties indispute agree otherwise, the dispute shall be submitted for arbitration under the Convention on the Settlement of Investment Disputes between States and Nationals of other States of 18th March, 1965. The arbitral tribunal constituted pursuant to the said Convention shall reach its decisions on the basis of this Agreement, any treaties in force between the Contracting Parties, such rules of general international law as may be applicable, and the domestic law of the Contracting Party in the territory of which the Investment inquestion is situated.

(3) The award shall be binding on the parties and shall not be subject to any appeal or remedy other than that provided for in the said Convention. The award shall be enforced in accordance with the domestic law of the Contracting Party in the territory of which the investment in question is situated.

(4) During arbitration proceedings or proceedings for the enforcement of an award, the Contracting Party involved in the dispute shall not raise the objection that the national or company concerned has received compensation under an Insurance contract in respect of all or part of his or its damage or losses.

87.
Article 10 of the Swiss BIT provides as follows in connection with the settlement of disputes arising under the treaty between a Contracting State and an investor of a Contracting State:

Disputes between a Contracting Party and an investor of the other Contracting Party

(1) For the purpose of solving disputes with respect to investments between a Contracting Party and an investor of the other Contracting Party and without prejudice to Article 11 of this Agreement (Disputes between Contracting Parties), consultations will take place between the parties concerned.

(2) If these consultations do not result in a solution within six months and if the investor concerned gives written consent, the dispute shall be submitted to the arbitration of the international Centre for Settlement of Investment Disputes instituted by the Convention of Washington of March 18, 1965, for the settlement of disputes regarding Investments between States and nationals of other States.

Each party may start the procedure by addressing a request to that effect to the Secretary-General of the Centre as foreseen by Article 28 and 36 of the above-mentioned Convention. Should the parties disagree on whether conciliation or arbitration is the most appropriate procedure, the investor concerned shall have the final decision.

(3) The arbitral tribunal shall decide on the basis of the present Agreement and other relevant agreements between the Contracting Parties; the terms of any particular agreement that has been concluded with respect to the Investment; the law of the Contracting State party to the dispute, including its rules on the conflict of laws; such rules of International law as may be applicable.

(4) The Contracting Party which is a party to the dispute shall not at any time during the procedures assert as a defence its Immunity or the fact that the investor has received compensation under an Insurance contract covering the whole or part of the incurred damage or loss.

(5) Neither Contracting Party shall pursue through diplomatic channels a dispute submitted to the arbitration of the Centre unless the other Contracting Party does not abide by and comply with the award rendered by the arbitral tribunal.

(6) The arbitral award shall be final and binding for the parties involved in the dispute and shall be enforceable inaccordance with the laws of the Contracting Party in which the Investment inquestion is located.

G. The Parties’ Respective Prayers for Relief

88.
The von Pezold Claimants seek declaratory relief and restitution plus compensation, or compensation alone, for the alleged violations by the Respondent of the terms of the German and Swiss BITs21. In particular, the von Pezold Claimants seek the following relief from this Tribunal (see Cl. Corrected Request for Relief, Section II):

Declaratory Relief - Jurisdiction

8.1 In relation to the von Pezold Claimants, a declaration that:

8.1.1 the German BIT provisionally applied from 18 September 1996;

8.1.2 the Tribunals have jurisdiction over their claims;

8.1.3 the Respondent is estopped from denying that the German BIT applies to their investments;

8.1.4 further or alternatively to the relief requested in para 8.1.3 above, the Respondent is estopped from denying that their investments were specifically approved by the Respondent’s competent authorities at the time of their admission, or denying any other facts (whether true or not) that may prevent the German BIT from being applicable to their investments;"

Declaratory Relief - Respondent’s defences

8.2 In relation to the von Pezold Claimants, a declaration that all of the Respondent’s defences are denied and dismissed.

Declaratory Relief - MFN

8.3 In relation to the Claimant Rüdiger, a declaration that he may invoke the German MFN Clauses to:

8.3.1 rely on Article 6(1) of the Swiss BIT, to the extent that Article accords more favourable treatment than Article 4(2) of the German BIT (non-discrimination and expropriation);

8.3.2 rely on Article 5(5) of the Danish BIT, to the extent that Article accords more favourable treatment than Ad Article 4 of the German Protocol (impairment of shares);

8.3.3 rely on Articles 5(1) and 5(2) of the Danish BIT, to the extent those articles accord more favourable treatment than Article 4(2) of the German BIT (compensation at fair market value for lawful expropriation);

8.3.4 be accorded restitution in kind, which is the more favourable treatment that has been granted to other foreign investors, and which has not been granted to him;

8.4 In relation to the Swiss Family Claimants, a declaration that they may invoke the MFN Clauses to:

8.4.1 rely on Article 5(5) of the Danish BIT, to the extent that Article accords more favourable treatment than Ad Article 4 of the German Protocol, and Article 6(2) of the Swiss BIT (impairment of shares);

8.4.2 rely on Articles 5(1) and 5(2) of the Danish BIT, to the extent those Articles accord more favourable treatment than Article 4(2) of the German BIT, and Article 6(1) of the Swiss BIT (compensation at fair market value for lawful expropriation);

8.4.3 be accorded restitution in kind, which is the more favourable treatment that has been granted to other foreign investors, and which has not been granted to them.

Declaratory Relief - Breaches of the BITs

8.5 In relation to the von Pezold Claimants, a declaration that the Respondent has breached the following Articles of the German BIT:

8.5.1 Article 4(2) by unlawfully expropriating the von Pezold Claimants’ investments and returns in that it has not observed the Conditions Permitting Expropriation;

8.5.2 Alternatively, Article 4(2) by expropriating the von Pezold Claimants’ investments and returns in that it has not observed the Conditions Permitting Expropriation;

8.5.3 Article 2(1) by failing to accord fair and equitable treatment to the von Pezold Claimants, their investments and their returns;

8.5.4 Article 2(2) by taking unreasonable, arbitrary and discriminatory measures that Impaired the management, maintenance use, enjoyment and disposal of the von Pezold Claimants’ Investments and their returns;

8.5.5 Article 4(1) by falling to accord the von Pezold Claimants, their investments and their returns full protection and security;

8.5.6 Article 5, 6(1) & (2) by falling to allow the free transfer of payments in connection with the von Pezold Claimants’ Investments; and

8.6 In relation to the von Pezold Claimants, a declaration that the Respondent has breached Article 5(5) of the Danish BIT (as applicable through the operation of the MFN Clauses) by Impairing or diminishing the fair market value of the von Pezold Claimants’ shares in the Forrester Companies, the Border Company Claimants and the Makandi Companies without the payment of prompt, adequate and effective compensation;

8.7 In relation to the Swiss Family Claimants, a declaration that the Respondent has breached the following Articles of the Swiss BIT:

8.7.1 Article 6(1) by unlawfully expropriating the Swiss Family Claimants’ Investments and returns in that it has not observed the Conditions Permitting Expropriation;

8.7.2 Alternatively, Article 6(1) by expropriating the Swiss Family Claimants’ Investments and returns in that it has not observed the Conditions Permitting Expropriation;

8.7.3 Article 4(1) falling to accord fair and equitable treatment to the Swiss Family Claimants, their investments, and their returns;

8.7.4 Article 4(1) by taking unreasonable and discriminatory measures that Impaired the management, maintenance, use, enjoyment, extension, and disposal of the Swiss Family Claimants’ Investments and returns;

8.7.5 Article 4(1) by falling to accord the Swiss Family Claimants, their investments and returns full protection and security;

8.7.6 Article 5 by falling to allow the free transfer of payments relating to the Swiss Family Claimants’ Investments; and

Declaratory Relief - Breaches of International Law

8.8 In relation to the von Pezold Claimants, a declaration that the Respondent:

8.8.1 Inapplying the Land Reform and Resettlement Programme to the von Pezold Claimants has grossly and/or systematically failed to fulfil its obligation arising under a peremptory norm of general International law, namely not to discriminate against people based on race or colour, and the consequences as stated in Article 41 of the ILC Articles apply;

8.8.2 has breached customary International law by expropriating the von Pezold Claimants’ Investments without the observance of the principles that expropriation under customary International law must be for a public purpose, be non-dlscrlmlnatory, observe due process of law, and be accompanied by payment of prompt, adequate and effective compensation.

Declaratory Relief - Breaches of Zimbabwean Law

8.9 In relation to the von Pezold Claimants, a declaration that the Respondent in applying the Land Reform Programme to the von Pezold Claimants has breached s. 18(1) and s. 23 of the Constitution.

Declaratory Relief - As to Election

8.10 In relation to the von Pezold Claimants, a declaration that they may elect to be awarded Heads of Loss 1, 2, 5, 9, 10, 14, and 15 in Corrected Annex 1 in the amounts as assessed on the date of breach or on the current date, whichever may be higher after Interest has been applied. All other Heads of Loss in Corrected Annex 1, in so far as they relate to the von Pezold Claimants, shall be assessed on the date of breach.

Declaratory Relief - Damage Caused by Respondent

8.11 In relation to the von Pezold Claimants, a declaration that the breaches of the BITs, international law and Zimbabwean law as pleaded in paragraphs 8.5 to 8.9 above have damaged the productive capacity and infrastructure of the Forrester Estate, the Border Estate and the Makandi Estate and thereby caused losses to the von Pezold Claimants, entitling the von Pezold Claimants, through restitution and compensation, to be put into the position that they would have been inhad those breaches not occurred.

Restitution in kind and compensation, or compensation alone

(a) Restitution in kind and compensation

8.12 In relation to the von Pezold Claimants, in regard to the Forrester, Border and Makandi Estates, ordering the Respondent:

8.12.1 to reinstate the companies listed in Table 1, Table 6 and Table 10 in the Memorial (as amended, "The Tables"), within 45 days of the dispatch of the Tribunal’s award ("the Restitution Window"), with the full legal title (unencumbered) (or alternatively to issue equivalent new legal title (unencumbered)), and the exclusive control, to each of the properties that they respectively owned (as listed in the Tables) before they were expropriated by the Respondent pursuant to the Constitutional Amendment, together with the Water Rights and the Permits listed respectively in Table 1 and Table 3 of the Reply (this relief is hereafter referred to as "the Restitution"), and, in addition, within 60 days of the dispatch of the Tribunal’s award, to pay those of the von Pezold Claimants, as specified below, compensation in the following sums:

Concerning the Forrester Estate

8.12.1.1 US$37,372,172 divided equally between the Parent Claimants or in such other manner of allocation that they may prefer;

8.12.1.2 US$7,186,302 or alternatively, US$8,697,776 to Elisabeth or in such other manner of allocation as Elisabeth may prefer;

Concerning the Border Estate

8.12.1.3 US$42,222,481 divided as follows-44% to each of the Parent Claimants, 12% divided equally between the Adult Children Claimants, or in such other manner of allocation that they may prefer; or

In the alternative, compensation alone

8.12.2 in the alternative to the relief requested in para . 8.12.1 above, or If the Restitution is not made infull within the Restitution Window, to pay, within 60 days of the dispatch of the Tribunal’s award, the von Pezold Claimants compensation in the following sums:

8.12.2.1 In relation to the Forrester Estate, US$61,874,400, divided equally between the Parent Claimants or insuch other manner of allocation that they may prefer;

8.12.2.2 In relation to the Forrester Estate, US$7,186,302 or alternatively, US$8,697,776, to Elisabeth or insuch other manner of allocation as Elisabeth may prefer;

8.12.2.3 In relation to the Border Estate, US$130,848,074, divided as follows -44% to each of the Parent Claimants, 12% divided equally between the Adult Children Claimants, or insuch other manner of allocation that they may prefer;

8.12.2.4 In relation to the Makandi Estate, compensation in the sum of US$13,930,012, divided equally between the Parent Claimants or insuch other manner of allocation that they may prefer.

Moral damages

8.13 In relation to the von Pezold Claimants, ordering the Respondent to pay them moral damages of US$13,000,000, allocated as US$5,000,000 to Heinrich and US$1,000,000 to each of the other von Pezold Claimants;

Interest

8.14 In relation to the von Pezold Claimants, ordering the Respondent to pay them compound Interest on any damages, save for moral damages, at the rate of 21.5%, compounded every six months, from the dates as stated in the Second Levitt Report, and as Indicated in Corrected Annex 1, until the date of payment, or alternatively at an Interest rate of 9.8%, or alternatively at an Interest rate of LIBOR plus 4%, compounded at the same Intervals, payable over the same periods;

Costs and further or additional relief

8.15 In relation to the von Pezold Claimants, ordering the Respondent to pay them (in the currency Incurred) all costs and expenses of this arbitration, including the fees and expenses of the Tribunal, experts and the cost of legal representation, plus Interest thereon until the date of payment; and

8.16 Further or additional relief as may be appropriate under the applicable law. [cltatlons/footnotes and Annex omitted]

89.
The Border Claimants seek declaratory relief and restitution plus compensation, or compensation alone, for the alleged violations by the Respondent of the terms of the Swiss BIT. In particular, the Border Claimants seek the following relief from this Tribunal (see Cl. Corrected Request for Relief, Section III):

Declaratory Relief - Jurisdiction

9.1 In relation to the Border Company Claimants, a declaration that:

9.1.1 the Tribunals have jurisdiction over their claims;

Declaratory Relief - Respondent’s defences

9.2 In relation to the Border Company Claimants, a declaration that all of the Respondent’s defences are denied and dismissed;

Declaratory Relief - MFN

9.3 A declaration that the Border Company Claimants may invoke the Swiss MFN Clauses to:

9.3.1 rely on Article 5(5) of the Danish BIT, to the extent that Article accords more favourable treatment than Article 6(2) of the Swiss BIT (impairment of shares);

9.3.2 rely on Article 6 of the German BIT, to the extent that Article accords more favourable treatment than Article 5 of the Swiss BIT (free transfer of payments);

9.3.3 rely on Articles 5(1) and 5(2) of the Danish BIT, to the extent those Articles are more favourable than Article 6(1) of the Swiss BIT (compensation at fair market value for lawful expropriation);

9.3.4 be accorded restitution in kind, which is the more favourable treatment that has been granted to other foreign investors, and which has not been granted to them.

Declaratory Relief - Breaches of the BITs

9.4 In relation to the Border Company Claimants a declaration that the Respondent has breached the following Articles of the Swiss BIT:

9.4.1 Article 6(1) by unlawfully expropriating the Border Company Claimants’ investments and returns in that it has not observed the Conditions Permitting Expropriation;

9.4.2 Alternatively, Article 6(1) by expropriating the Border Company Claimants’ investments and returns in that it has not observed the Conditions Permitting Expropriation;

9.4.3 Article 4(1) by failing to accord fair and equitable treatment to the Border Company Claimants, their investments, and their returns;

9.4.4 Article 4(1) by taking unreasonable and discriminatory measures that Impaired the management, maintenance, use, enjoyment, extension, and disposal of the Border Company Claimants’ investments and their returns;

9.4.5 Article 4(1) by failing to accord the Border Company Claimants, their investments and returns full protection and security;

9.4.6 Article 5 by falling to allow the free transfer of payments relating to the Border Company Claimants’ investments.

9.5 in relation to Border, a declaration that the Respondent has breached Article 5(5) of the Danish BIT (as applicable through the operation of the Swiss MFN Clauses) by impairing or diminishing the fair market value of Border’s shares in Hangani and Border International without the payment of prompt, adequate and effective compensation.

Declaratory Relief - Breaches of International Law

9.6 In relation to the Border Company Claimants, a declaration that the Respondent:

9.6.1 Inapplying the Land Reform and Resettlement Programme to the Border Company Claimants has grossly and/or systematically failed to fulfil its obligation arising under a peremptory norm of general International law, namely not to discriminate against people based on race or colour, and the consequences as stated in Article 41 of the ILC Articles apply;

9.6.2 has breached International law by expropriating the Border Company Claimants’ Investments without the observance of the principles that expropriation under customary International law must be for a public purpose, be non-dlscrlmlnatory, observe due process of law, and be accompanied by payment of prompt, adequate and effective compensation.

Declaratory Relief - Breaches of Zimbabwean Law

9.7 In relation to the Border Company Claimants, a declaration that the Respondent in applying the Land Reform Programme to the Border Company Claimants has breached s18(1)57 and s2358 of the Constitution.

Declaratory Relief - As to Election

9.8 In relation to the Border Company Claimants, a declaration that they may elect to be awarded Heads of Loss 9 and 10 in Corrected Annex 1 in the amounts as assessed on the date of breach or on the current date, whichever may be higher after Interest has been applied. All other Heads of Loss in Corrected Annex 1, in so far as they relate to the Border Company Claimants, shall be assessed on the date of breach.

Declaratory Relief - Damage Caused by Respondent

9.9 In relation to the Border Company Claimants, a declaration that the breaches of the BITs, International law and Zimbabwean law as pleaded in paras 9.4 to 9.7 above have damaged the productive capacity and Infrastructure of the Border Estate and thereby caused losses to the Border Company Claimants, entitling the Border Company Claimants, through restitution and compensation, to be put Into the position that they would have been in had those breaches not occurred.

Restitution in kind and compensation, or compensation alone

(a) Restitution in kind and compensation

9.10 In relation to the Border Company Claimants, ordering the Respondent:

9.10.1 to reinstate Border Timbers Limited and Hangani Development Co. (Private) Limited, within 45 days of the dispatch of the Tribunal’s award ("the Restitution Window"), with the full legal title (unencumbered) (or in the alternative to issue equivalent new legal title (unencumbered)) and the exclusive control, to each of the properties that they respectively owned (as listed in Table 6 in the Memorial, as amended) before they were expropriated by the Respondent pursuant to the Constitutional Amendment (this relief is hereafter referred to as "the Restitution"), and, in addition, within 60 days of the dispatch of the Tribunal’s award, to pay compensation of US$48,817,76160 allocated to Border Timbers Limited or insuch manner of allocation that the Border Company Claimants may prefer; or

(b) in the alternative, compensation alone

9.10.2 in the alternative to the relief requested in paragraph 9.10.1 above, or if the Restitution is not made in full within the Restitution Window, to pay, within 60 days of the dispatch of the Tribunal’s award, the Border Company Claimants compensation of US$151,286,939 61 allocated to Border Timbers Limited or in such manner of allocation that the Border Company Claimants may prefer.

Moral damages

9.11 Ordering the Respondent to pay the Border Company Claimants moral damages of US$5,000,000, allocated to Border Timbers Limited or in such manner of allocation that the Border Company Claimants may prefer;

Interest

9.12 Ordering the Respondent to pay the Border Company Claimants compound interest on any damages, save for moral damages, at the rate of 21.5%, compounded every six months, from the dates as stated in the Second Levitt Report, and as Indicated in Corrected Annex 1, until the date of payment, or alternatively at an interest rate of 9.8%, or alternatively at an interest rate of LIBOR plus 4%, compounded at the same intervals, payable over the same periods;

Costs and further or additional relief

9.13 Ordering the Respondent to pay the Border Company Claimants (in the currency incurred) all costs and expenses of this arbitration, including the fees and expenses of the Tribunal, and experts, and the cost of legal representation, plus interest thereon until the date of payment; and

9.14 Further or additional relief as may be appropriate under the applicable law. [citations/footnotes and Annex omitted]

90.
The Respondent opposes the von Pezold and Border Claimants’ respective requests for relief and asks that all of the foregoing requests be denied (See the Respondent’s Corrected Request for Relief of 9 Septmeber 2013):

RESPONDENT RESPECTFULLY REQUESTS THE ARBITRAL TRIBUNAL TO DECLARE:

1 THAT THE FOLLOWING FACTS RELEVANT TO JURISDICTION ARE ON THE RECORD

1.1 that consent is the cornerstone of ICSID jurisdiction and must be in writing

1.2 that consent of the parties to ICSID jurisdiction takes the form of the provisions of the Swiss BIT and the German BIT

1.2.1 that Article 9 of the German BIT applies in its entirety

1.2.2 that Article 2 of the Swiss BIT applies

1.3 that Respondent had in place at all relevant times

1.3.1 FIC / ZIC / ZIA Foreign Investment approval procedures

1.3.2 Stock Exchange Rules

1.3.3 Exchange Control Regulations

1.4 that Claimants did not comply with Local Law procedures, in particular Foreign Investment Regulations, Stock Exchange Rules and Exchange Control Regulations, to confer 'foreign investor" status on their acquisitions of holdings

1.5 that Claimants have not produced any writing which proves their respect of the provisions of Article 9 a) of the German BIT, as regards Foreign Investment Regulations, Stock Exchange Rules and Exchange Control Regulations

1.6 that Claimants have not produced any writing which proves their respect of the provisions of Article 9 b), as regards Foreign Investment Regulations

1.7 that Claimants have not produced any writing which proves their respect of the provisions of Article 2 of the Swiss BIT, as regards in particular Foreign Investment Regulations, Stock Exchange Rules and Exchange Control Regulations

1.8 that Claimants have not proven any valid approval — whether prior to their confidential acquisitions or thereafter, such as subsequent to entry into force of the Swiss BIT or the German BIT

1.9 that the provisions of the Swiss BIT and the German BIT that are to be upheld — by both the party claiming protected investor status and the Host State — include all of the terms of the BIT particularly Article 9 a) and Article 9 b) of the German BIT and Article 2 of the Swiss BIT

1.10 that Claimants have not proven any waiver of the provisions of the German and the Swiss BITs, binding on the State of Zimbabwe

1.11 that Claimants have not proven that the State of Zimbabwe solicited these investments

1.12 that Claimants have not proven estoppel

1.13 that Illegality vitiates consent

2 THAT AS TO JURISDICTION THERE ARE SIX LEGALLY-DISTINCT REASONS THESE ARBITRAL TRIBUNALS HAVE NO JURISDICTION

2.1 that Claimants' acquisitions do not meet the "in accordance with the laws of the Host State" condition to Respondent's consent under Article 2 of the Swiss BIT, as Claimants did not comply with local laws, rules and regulations that existed at all relevant times:

2.1.1 Cap on holdings under Zimbabwe Stock Exchange Regulations

2.1.2 Zimbabwe Exchange Control Regulations

2.1.3 Zimbabwe Foreign Investment Regulations

2.2 that Claimants' acquisitions do not meet the "in accordance with the laws of the Host State" condition to Respondent's consent under Article 9a of the German BIT, as Claimants did not comply with:

2.2.1 Local laws, rules and regulations that existed at all relevant times:

2.2.1.1 Cap on holdings under Zimbabwe Stock Exchange Regulations

2.2.1.2 Zimbabwe Exchange Control Regulation

2.2.1.3 Zimbabwe Foreign Investment Regulations

2.2.2 The "specific approval" requirement of Article 9b) of the German BIT for an ition to constitute a "foreign investment" incorporated into Local Law by means of the treaty being ratified and thus also applicable under Article 9a) of the German BIT

2.3 that Claimants' acquisitions are not a protected investment but a mere "holding" of a "portfolio"

2.4 that Claimants' acquisitions do not meet the "Specific approval" condition to Respondent's consent under Article 9 b) of the German BIT

2.5 that there is no consent by Respondent to ICSID protection for Claimants' acquisitions as per the ICISD Convention and as per ICSID case law

2.6 that the dispute does not arise out of an "investment" within the meaning of the ICISD Convention

2.6.1 that Claimants have not made any "new" investment as foreseen by the State Parties at the time of entering into the BITs

2.6.2 that Claimants have not proven any contribution to the economy of the Host State and drained off the riches of the Host State into a nebulous maze of tax havens, thereby weakening the economy of the Host State

2.6.3 that Claimants' confidential holdings are merely commercial interests in the nature of a portfolio, not a protected investment

2.6.4 that Claimants' own argument shows that their acquisitions did not involve risk, so not a protected investment

2.6.5 that Claimants' indirect claims are not within ICSID jurisdiction

3 THAT, EVEN IF JURISDICTION, THE SIX REASONS SET FORTH IN SECTIONS 2.1 THROUGH 2.6 ABOVE ALSO CAUSE CLAIMANTS' CONFIDENTIAL ACQUISITIONS NOT TO BE PROTECTED INVESTMENTS AS TO THE MERITS

3.1 that Claimants did serious due diligence

3.2 that Claimants did not seek or have any guarantee other than local law

4 THAT EVEN IF JURISDICTION, THERE ARE THREE LEGALLY-DISTINCT FOUNDATIONS UPON WHICH ZIMBABWE LAND REFORM MEASURES CONSTITUTE NON-PRECLUDED MEASURES

4.1 that Zimbabwe Land Reform is a Non-Precluded Measure as « force majeure » under ILC draft Article 23

4.1.1 that the massive-popular-uprisings-all-across-Zimbabwe were spontaneous, contrary to Government plans and are part of the overwhelming and ineluctable March of History

4.1.2 that the Zimbabwean Government was not in favor of the massive-popular-spontaneous-ineluctable-uprisings-all-across-Zimbabwe

4.1.3 that no one - including Claimants and the members of these Arbitral Tribunals — can be sure in their deepest conscience that had they been in a position in the Zimbabwean Government and had they ordered police - including CFU reserve police troops — to suppress the massive-popular-spontaneous-ineluctable-uprisings-all-across-Zimbabwe that an Egypt or Syria style Internal massacre would not have occurred

4.1.4 that the State of Zimbabwe was correct in not ordering its police to fire on the population of Zimbabwe

4.1.5 that President Mugabe and the Government, faced with the circumstances Imposed upon them by the massive-popular-spontaneous-ineluctable- uprisings-all-across-Zimbabwe managed a difficult situation as best they could and have worked for the good of the Zimbabwean People

4.1.6 that the Zimbabwean Government was cautious and reasonable towards the masses of land-hungry Zimbabweans who marched with sticks and stones

4.1.7 that War veterans are neither "thugs," nor "rubber stamps" nor are they "the State"

4.1.8 that War veterans' and the land-hungry masses' hostility to the Government's slow pace of land reform forced the Government to embark on Fast Track Land Reform,

4.1.9 that the Zimbabwean Government was cautious and reasonable towards European Landed Gentry

4.1.10 that in particular, the Zimbabwean State acted cautiously and reasonably as concerns Claimants, as Respondent's granted Claimants eight years of substantially unencumbered use of the Forrester Estate, the Border Estate and the Makandi Estate

4.1.11 that the massive-popular-spontaneous-ineluctable-uprisings-all-across- Zimbabwe were for Respondent an Irresistible force

4.2 that Zimbabwe Land Reform is a Non-Precluded Measure as « distress» under ILC draft Article 24 as Respondent's recognition of the overwhelming force of the masses saved countless lives of persons entrusted to the Host State's care

4.3 that Zimbabwe Land Reform is a Non-Precluded Measure as «necessity» under ILC draft Article 25 as it avoided grave danger to the essential interests of the State

4.3.1 that such emergency crisis threats were sufficiently grave to trigger application of the State of Necessity defence

4.3.2 that the events of massive-popular-spontaneous-lneluctable-uprisings-all- across-Zimbabwe in their historic context were an emergency or crisis out of the ordinary day-to-day functioning of the State from 16 February 2000 through 16 March 2013 through 16 March 2013

4.3.3 that the massive-popular-spontaneous-ineluctable-uprisings-all-across-Zimbabwe ongoingness of the State of Zimbabwe

5 THAT EVEN IF JURISDICTION, ZIMBABWE LAND REFORM IS A NON-PRECLUDED MEASURE AS "PUBLIC ORDER" UNDER GERMAN BIT

5.1 that the German BIT excludes from BIT protection for the investor decisions made by the Host State in order to maintain "public order"

5.2 that "public order" properly has the broad German definition and not the narrow North American definition

5.3 that the massive-popular-spontaneous-ineluctable-uprisings-all-across-Zimbabwe constituted an emergency or crisis, with threats sufficiently grave to trigger application of the BIT "public order" exception

6 THAT IN THE EVENT THE ARBITRAL TRIBUNALS FIND EITHER

CLAIMANTS' FAILURE TO RESPECT ARTICLE 2B) "SPECIFIC APPROVAL" REQUIREMENT OR THAT ZIMBABWE LAND REFORM IS A NON-PRECLUDED MEASURE AS PER THE "PUBLIC ORDER" PROVISION OF THE GERMAN BIT, NO APPLICATION OF THE SWISS BIT IS POSSIBLE

6.1 that Claimant Rudiger cannot benefit from any protection under the Swiss BIT

6.2 that Claimants have not proven the percentage holdings owned directly, indirectly, beneficially or which are "controlled" or "handled" by Claimant Rudiger, so no accurate determination of damages is sufficiently certain under the Swiss BIT

6.3 that there is insufficient proof upon which any award might be granted

1 THAT THE FACTS AND LAW PRECLUDE WRONGFULNESS UNDER

THE SWISS BIT, THE GERMAN BIT AND INTERNATIONAL LAW

7.1 that as the uprisings of the Zimbabwean people were, massive, popular, spontaneous and ineluctable, Zimbabwe Land Reform is a "Public Purpose" which excludes "wrongfulness"

7.1.1 that Zimbabwe Land Reform increased well-being of Zimbabweans and has been successful

7.1.1.1 that the interests of the Zimbabwean people have been and are being served by the Land Reform Programme

7.1.1.2 that the interests of the Zimbabwean women have been and are being served by the Land Reform Programme

7.1.1.3 that the future holds promise in part thanks to Zimbabwe Land Reform

7.1.1.4 that a successful revolution begets its own legality and the Zimbabwean Revolution has succeeded

7.1.1.5 that Fast Track Land Reform has attenuated history of violence in Zimbabwe

7.2 that Claimants' negative arguments to cancel public purpose are not sound

7.2.1 that publicity is not the basis of law

7.2.2 that Respondent did not discriminate against people based on race or colour

7.2.3 that Zimbabwe Land Reform has advanced Human rights for Zimbabweans

7.2.4 that human rights treaties recognize limitations on otherwise protected rights for specified, overarching public policy reasons, such as security and public order

7.2.5 that the popular uprisings are not attributable to the State of Zimbabwe

7.2.6 that controlling squatters has never been successful, whomever attempts to evict the locals from their ancestors' land

7.2.7 that Claimants' other arguments that Zimbabwe's Fast Track Land Reform violated BIT protections must fall as to:

7.2.7.1 Fair and Equitable Treatment

7.2.7.2 Full protection and Security

7.2.7.3 Compensation: the Zimbabwean State granted Claimants eight years of substantially unencumbered use of the Forrester Estate, the Border Estate and the Makandi Estate, which meets the requirement of prompt, adequate and effective compensation

7.2.7.4 Zimbabweans are not either subsistence farmers or corrupt elite

7.3 that Claimants' position as to its legitimate expectations is unfounded and any legitimate expectations Claimants might have do not contradict

7.3.1 the lack of "wrongfulness" of the taking

7.3.2 "Public Order"

7.3.3 "Essential Interests" Interpretations

7.4 that Claimants' anachronistic model cannot be propulsed into the future

7.5 that the Respondent did not breach any terms of the B/Ts that apply to it

7.6 that the taking was lawful

8 THAT NO INDEMNITIES, COMPENSATION, DAMAGES OR INTEREST IS DUE FOR REASON:

8.1 that Claimants' acquisitions do not meet the "in accordance with the laws of the Host State" condition to Respondent's consent under Article 2 of the Swiss BIT

8.2 that Claimants' acquisitions do not meet the "in accordance with the laws of the Host State" condition to Respondent's consent under Article 9a of the German BIT

8.3 that Claimants' acquisitions do not meet the "Specific approval" condition to Respondent's consent under Article 9 b) of the German BIT

8.4 that Claimants' acquisitions are not a protected investment but a mere "holding" of a "portfolio"

8.5 that there is no consent by Respondent to ICSID protection for Claimants' acquisitions as per the ICISD Convention and ICSID case law

8.6 that the dispute does not arise out of an "investment" within the meaning of the ICISD Convention

8.7 that a legitimate public purpose suffices to qualify the measure, the Land Reform Programme and the ensuring police power decisions in the case at hand, as being a normal exercise of police powers and hence non compensable, irrespective of the magnitude of its effects on the investment

9 THAT FROM 16 FEBRUARY 2000 THROUGH 16 MARCH 2013 ANY INDEMNITIES, COMPENSATION, DAMAGES OR INTEREST THAT MIGHT OTHER WISE BE AWARDED ARE SUSPENDED AND ANY CALCULATIONS ONLY COMMENCE AS FROM 17 MARCH 2013

9.1 that a state of emergency began in Zimbabwe on 16 February 2000, continued thereafter, and ended on 16 March 2013

9.2 that any amounts that might otherwise be due or payable during this period are excused during that period of suspension

10 AS TO CLAIMANTS' REQUEST FOR INDEMNITIES, COMPENSATION AND DAMAGES

10.1 that Claimants' monetary claims are not properly founded for the legal reasons discussed above, are ill-advised as to evaluation and should be denied:

10.1.1 that Dr Kanyekanye has demonstrated that Claimants' forestry assumptions on which their claims are based are incorrect

10.1.2 that Dr Kanyekanye has determined the value of the Border Estate

10.1.3 that Mr. Moyo has determined the maximum valuations of the Forrester, Makandi and Border Estates

10.2 that subsidiarily, were the Arbitral Tribunals to find that any portion of Claimants'claims were protected, the following amounts are the maximum amount of indemnities, compensation and damages

10.2.1 that Mr Moyo's final corrected expert valuations prove that the maximum valuation:

10.2.1.1 of the Forrester Estate is:

Land: $ 5 123 436

Equipment and Infrastructure: $12 062 898

10.2.1.2 of the Makandi Estate is:

Land: $ 1 115 000

Equipment and Infrastructure: $ 9 269 308

10.2.2 that the shareholding valuation of Border is the only quoted price value

10.2.2.1 Dr Kanyekanye established the Border share valuation at $6 763 044, the quoted price value

10.2.2.2 Mr Moyo corrected his valuation opinion to state that the share valuation figure established by Dr Kanyekanye should prevail $6 763 044, the quoted price value

10.2.3 provided, however, that should be deducted from these maximum amounts, the valuations included in those maximum totals the following properties that were not taken:

10.2.3.1 Paulington $ 3 193 678,80

10.2.3.2 BIT Factory $ 3 045 993,00

10.2.3.3 Pole Treatment Plant $ 358 134,00

10.2.3.4 Border Timbers Head Office Complex $ 3 423 030,60

10.2.3.5 For the avoidance of doubt, the total valuations regarding properties not taken is $10 020 836,40

10.2.4 that for the avoidance of doubt, that the maximum total for Forrester, Makandi and Border combined is thus $34 333 686

10.3that subsidiarily, should the Arbitral Tribuanl not accept the quoted price value of Border shares, Mr Moyo and Respondent stand by Mr Moyo's asset valualtion of the Border Estate set out in paragraph 13 of R-80:

10.3.1.1 land: $6 011 685

10.3.1.2 equipment and Infrastructure: $22 386 761

10.4 that according to their damage presentation Claimants failed to mitigate damages other than by profiting from use of the Properties for eight years after September 2005

10.5 that as to Claimant's request for restitution in kind and compensation, or in the alternative, compensation

10.5.1 that Respondent is unable to reinstate the companies as requested

10.5.2 that restitution is not possible and the end of the State of Emergency on 16 March 2013 cannot give rise to measures which would re-create the State of Emergency such as restitution or additional compensation to Claimants

10.6 that there is no justification for the award of any moral damages

10.7 As to the rate of interest on any amounts that might be due:

10.7.1 that 21.5% Interest is unconscionable and must be denied

10.7.2 that 9.8% Interest is unconscionable and must be denied

10.7.3 that LIBOR plus 4% Interest is unconscionable and must be denied

10.7.4 that LIBOR plus 2% is the highest rate that can be applied

10.8 As to compounding of interest on any amounts that might be due:

10.8.1 that no compounding is appropriate in this case

10.8.2 that were Interest to be compounded, it should not be compounded more than annually

10.8.3 that were the Arbitral Tribunals nevertheless to find any Indemnities, compensation, damages or Interest to be due, the Arbitral Tribunals should consider Respondent's grant to Claimants of eight years of quasi unencumbered use of the Forrester Estate, the Border Estate and the Makandi Estate, properties belonging to the State of Zimbabwe since 2005 to constitute:

10.8.4 compensation for the taking

10.8.5 payment of any interest or other amounts due

10.9 that each party shall bear its own costs both as to its attorneys' fees and as to ICSID costs and fees

11 THAT EACH OF THE DECLARATIONS SOUGHT BY THE CLAIMANTS ARE WITHOUT MERIT AND MUST BE DENIED

[footnotes omitted]

IV Factual Background

91.
This Tribunal sets out below a brief summary of the factual basis for its decisions in the present Award. Where disputed by the Parties, the Tribunal has established these facts primarily from the contemporaneous documentation adduced in evidence by the Parties, supplemented by the testimony of their factual and expert witnesses (both oral and written) as provided to the Tribunal in this arbitration. This summary does not purport exclusively to cover all relevant facts relied on by the Tribunal in reaching its decision.

A. Introduction

92.
This case is, at its heart, a land dispute, but one with deep context and history. The "land question" in Zimbabwe, formerly Southern Rhodesia ("Rhodesia"), began in the late 1800s with the arrival of Cecil John Rhodes on the area controlled at the time by King Lobengula. During the period of colonial rule, land in Rhodesia was subdivided into white areas, or white commercial farms, and tribal trust lands where those native to the land were forced to live.
93.
The result of Rhodesian-era land policies and colonial oppression was nothing short of devastating on the indigenous population and gave way to a violent and persistent struggle for "liberation", expressed as follows by Minister Didiymus Mutasa, a witness in these proceedings for the Respondent (see Mutasa I, para. 15):

... [O]ur existence in our own country, on our own land in the days before liberation, was a very sad existence indeed. Our land was taken away, our friends, who were talking about farms, are talking about farms which didn't come from heaven for them, but farms which they expropriated from our forefathers, from our ancestors, many not so long ago, where many of us were already living. They did not expect us to sit back and smile and enjoy what they were doing, and indeed, we did not sit back and enjoy. We had to mount a liberation struggle, and I am happy to say that I am one of those who participated in the liberation struggle.

94.
This "liberation struggle" led to the Lancaster House Conference in 1979, and the birth of a new Independent State - the Republic of Zimbabwe.
95.
The Lancaster House Agreement established Zimbabwe’s first Constitution, which provided for, among other things, robust private property rights. The newly formed Government of Zimbabwe, ultimately led by President Robert Mugabe following his election as President in February 1980, committed to suspend the institution of land reform for 10 years following Zimbabwe’s independence.
96.
As at 1980, 15.5 million hectares ("ha") of Zimbabwe’s total area (i.e., 39.6 million ha) were dedicated to large scale commercial farming. Title to this land was held by approximately 6,000 white farmers. 6.4 million ha were comprised of Communal Land, largely devoted to subsistence farming by the indigenous population, and the remaining land was divided between small scale commercial operations, national parks, State land and urban settlements.

B. The Land Reform Programme

(1) The First Phase

97.
During Phase I of the LRP, the Government of Zimbabwe aimed to acquire on a "willing buyer-willing seller" basis 8.3 million ha of agricultural land from large-scale farms in order to resettle 162,000 families. Little progress was made toward this goal during the first 10 years of independence.
98.
The Government enacted the Land Acquisition Act in 1992, which gave the Government the power to acquire land and other immovable property compulsorily for certain purposes, including the acquisition of agricultural land for resettlement purposes. Accordingly, this ended the period of time during which agricultural land could only be acquired by the State on a willing buyer - willing seller basis.
99.
The Land Acquisition Act provided for notice to be given of the proposed acquisition (a "Section 5 Notice") and a process whereby the acquisition could be challenged. If a Section 5 Notice was challenged, the Government was required to make an application to the appropriate municipal court, seeking either authorization to issue a Section 8 Order, which would vest title in the land to the State, or confirmation of a Section 8 Order if one had already been issued.
100.
The Land Acquisition Act established that "fair compensation" must be paid for any land acquired for resettlement purposes "within a reasonable time".
101.
The Constitution was amended in 1996 to confirm that protection continued for the property rights of foreign nationals under international investment treaties despite the LRP. Specifically, Section 16(9b) provided as follows:

(9b) Nothing in this section shall affect or derogate from—

(a) any obligation assumed by the State; or

(b) any right or Interest conferred upon any person;

in relation to the protection of property and the payment and determination of compensation inrespect of the acquisition of property. Interms of any convention, treaty or agreement acceded to, concluded or executed by or under the authority of the President with one or more foreign states or governments or International organisations.

[Subsection inserted by section 7 of Act No. 14 of 1996 - Amendment No. 14]

[emphasis added]

102.
By 1997, however, the Government had only acquired 3.5 million ha and had only resettled 71,000 families.

(2) The Second Phase

103.
In 1998, the Government hosted a land donor conference, during which the issue of compensation for land reform for resettlement was discussed, with a view to securing a stronger commitment from the International community to support Zimbabwe’s land reform efforts. The timing of the conference coincided with Zimbabwe’s shift Into Phase II of the LRP, in which It Intended to accelerate the pace of land acquisition for resettlement.
104.
Phase II was itself composed of several phases, including an "Inception Phase" during which the Government stated its Intention to acquire an additional 2.1 million ha of agricultural land beyond the original planned 8.3 million ha. The pace of land acquisition during this phase continued, however, to be slow, inpart due to a lack of funds to compensate land owners for land acquired from them.
105.
The slow pace of land reform, two decades after Independence, led to mounting frustration among those Zimbabweans who had fought for Independence. The Government responded by adopting measures to further accelerate land reform and resettlement.
106.

In February 2000, a new draft Constitution was put in a referendum to the people of Zimbabwe, which would have permitted the Government to compulsorily acquire land without compensation. The draft Constitution was rejected. The timing of the referendum on the Constitution coincided with the emergence of a new political party in Zimbabwe, the Movement for Democratic Change ("MDC"), formed by a broad coalition of civil society groups inopposition to President Mugabe’s Zimbabwe African National Union - Patriotic Front ("ZANU-PF") party. Following the rejection of the draft Constitution, the first "Invasions" of white-owned farms began in Masvlngo Province, near the capital of Harare, and gradually spread across the country (see below Section IV.C.).

107.
The Government subsequently launched, on 15 July 2000, the Fast Track Land Reform Programme ("FTLRP"). Another shift in land acquisition principles occurred as part of this phase of land reform. The Constitution was amended through the enactment of Section 16A, which changed the compensation regime for the acquisition of land, permitting the Government to compensate landowners only for "improvements" to agricultural land, as opposed to the land itself. Section 16A provided as follows:

16A Agricultural land acquired for resettlement

(1) In regard to the compulsory acquisition of agricultural land for the resettlement of people inaccordance with a programme of land reform, the following factors shall be regarded as of ultimate and overriding Importance -

(a) under colonial domination the people of Zimbabwe were unjustifiably dispossessed of their land and other resources without compensation;

(b) the people consequently took up arms in order to regain their land and political sovereignty, and this ultimately resulted in the independence of Zimbabwe in 1980;

(c) the people of Zimbabwe must be enabled to reassert their rights and regain ownership of their land;

and accordingly—

(i) the former colonial power has an obligation to pay compensation for agricultural land compulsorily acquired for resettlement, through an adequate fund established for the purpose : and

(ii) If the former colonial power falls to pay compensation through such a fund, the Government of Zimbabwe has no obligation to pay compensation for agricultural land compulsorily acquired for resettlement.

(2) In view of the overriding considerations set out insubsection (1), where agricultural land is acquired compulsorily for the resettlement of people in accordance with a programme of land reform, the following factors shall be taken into account in the assessment of any compensation that may be payable

(a) the history of the ownership, use and occupation of the land;

(b) the price paid for the land when it was last acquired;

(c) the cost or value of improvements on the land :

(d) the current use to which the land and any improvements on it are being put;

(e) any investment which the State or the acquiring authority may have made which Improved or enhanced the value of the land and any improvements on it;

(f) the resources available to the acquiring authority in Implementing the programme of land reform;

(g) any financial constraints that necessitate the payment of compensation in instalments over a period of time; and

(h) any other relevant factor that may be specified in an Act of Parliament.

[Section inserted by section 3 of Act 5 of 2000 - Amendment No. 16] [emphasis added]

108.
Through Section 16A the burden of compensating land owners for the acquisition of their land was also shifted by the Government onto the "former colonial power" (i.e., Great Britain) and Zimbabwe absolved itself under Zimbabwean law of any duty to compensate landowners for the value of agricultural land acquired for resettlement purposes, save for "improvements".
109.
The Land Acquisition Act was amended accordingly to remove compensation for agricultural land acquired compulsorily by the State.

C. The Invasions

110.
As noted above, the "Invasions" of predominantly white-owned farms also marked the beginning of the FTLRP. The Tribunal has considered the various accounts of these "Invasions" presented by the Parties. The Tribunal considers the evidence given by Professor Stephen Chan on the Invasions to be Instructive and helpful, particularly as it was not challenged by the Respondent on cross-examination.
111.
Professor Chan is a Professor of International Relations and Dean of Law and Social Sciences at the School of Oriental & African Studies at the University of London, and Eminent Scholar in Global Development 2010, of the International Studies Association. Beyond academia, Professor Chan’s career Includes work for government and International organizations, with a special focus on Africa, including the Republic of Zimbabwe. In the 1970s, Professor Chan was a civil servant with the Commonwealth Secretariat and served as an observer of the 1979 negotiations leading to Zimbabwe’s Independence. From January to March 1980, Professor Chan conducted the reconnaissance for, and helped anchor, the Commonwealth Observer Group charged with the validation of the electoral process leading to Zimbabwe’s Independence. Professor Chan resided in Africa from 1980 to 1985, and has, for the past 35 years, visited Zimbabwe nearly every year to talk with politicians, civil servants, military personnel and other Influential persons to obtain firsthand knowledge of the political, social and economic developments in-Zimbabwe. His credentials are Impressive and, in addition to being a well-qualified expert, he is able to speak, to some extent, from first-hand experience on the matters at hand.
112.
From Professor Chan’s evidence, as corroborated and supplemented by other accounts on the record, the Tribunal finds the following facts to have been established on the evidence:

(a) the Invasions of predominantly white-owned commercial farms began in the Province of Masvlngo on 16 February 2000, and quickly spread to other parts of Zimbabwe;

(b) the Invasions were a response to political events, such as the failed draft Constitution proposed by the Mugabe Government in February 2000, and the slow pace of land reform;

(c) the Invasions were not anticipated and, at the beginning, were disorganized and "inchoate", by which the Tribunal understands that the Invasions at this stage were incipient;

(d) the Invasions were accompanied by a racial rhetoric that was overwhelmingly anti-white;

(e) as the Invasions continued and expanded across Zimbabwe, logistical support and supplies appear to have been provided by organs of the Zimbabwean Government to persons coming onto private land (i.e., the "Settlers/War Veterans").

113.

Several judgments by the Zimbabwean courts also record that, during 2000, the police took little or no action inrespect of the acts of the Invaders, despite multiple court orders declaring the Invasions to be unlawful and directing the police to ensure that the Invaders vacated the farms. Moreover, ZANU-PF officials, public servants, the CIO and the Army were found to have actively supported, encouraged, transported and financed the Settlers/War Veterans. In CFU v. Minister of Lands & Ors, 2000 (2) ZLR 469(5), the Zimbabwean High Court held that, as a result of the Invasions, farmers and their employees had been denied protection of the law under s. 18 of the Constitution22 and discriminated against on the basis of affiliation with or support for an opposition political party (i.e., the MDC). The Court summarized the Invasions in early 2000 as follows (see CFU v. Minister of Lands & Ors, 2000 (2) ZLR 469(5), p. 477, CLEX-76):

In February 2000, a referendum was held on a proposed new Constitution for Zimbabwe. The defeat of that proposal was followed "within a matter of days by the beginning of a series of land Invasions. Although these began as a supposedly peaceful demonstration they quickly gathered such momentum that it became obvious that the exercise was actually being driven by or had been taken over by Government" (Hasluck).

The story of these demonstratlons/invasions is set out ingraphic detail in the CFU’s papers, more particularly in Mr Hasluck’s affidavits. Murders (in the early stages), serious assaults, trespass, arson, stock-theft, poaching and malicious Injury to property became rife throughout the commercial farming areas. The reaction of the police was either nil or negligible, with Isolated exceptions. War veterans, landless peasant farmers and unemployed youths moved onto farms, ferried insome cases in Government vehicles, encouraged by party politicians. Some were aggressive, forcing the farmers to flee, burning down workers’ houses, forbidding the reaping or planting of crops. Others cut fences and cut down trees to make temporary shelters. Others again were more passive, simply making temporary shelters for themselves and leaving when the subsidy they were given ran out. The situation throughout the commercial farming areas remained, and remains, tense and volatile. The harassment continues and inmany cases has Intensified.

114.
As regards the Claimants’ Estates (described below) in particular, Mr. Heinrich von Pezold’s evidence confirms the passive role of the police inaddressing the Settlers’/War Veterans’ activity and the active Involvement of government officials and agents insupporting and providing resources for Invaders on the Estates (see Heinrich I, paras. 575-586).
115.
All three of the Claimants’ Estates have been Invaded and Settlers/War Veterans who Invaded the Estates remain inoccupation of certain portions of the Estates.

D. The 2005 Constitutional Amendment

116.
The Constitution was again amended In 2005 (the "2005 Constitutional Amendment") by enacting Section 16B, which provided, inrelevant part, as follows:

16B Agricultural land acquired for resettlement and other purposes

(1) in this section -

(a) all agricultural land

(i) that was Identified on or before the 8th July, 2005, in the Gazette or Gazette Extraordinary under section 5(1) of the Land Acquisition Act [Chapter 20:101, and which is Itemised in Schedule 7, being agricultural land required for resettlement purposes : or

(ii) that is Identified after the 8th July, 2005, but before the appointed day,

in the Gazette or Gazette Extraordinary under section 5(1) of the Land Acquisition Act [Chapter 20:10], being agricultural land required for resettlement purposes; or

(iii) that is Identified interms of this section by the acquiring authority after the appointed day in the Gazette or Gazette Extraordinary for whatever purpose, including, but not limited to —

A. settlement for agricultural or other purposes; or

B. the purposes of land reorganisation, forestry, environmental conservation or the utilisation of wild life or other natural resources; or

C. the relocation of persons dispossessed inconsequence of the utilisation of land for a purpose referred to insubparagraph A or B;

is acquired by and vested in the State with full title therein with effect from the appointed day or, in the case of land referred to insubparagraph (iii), with effect from the date it is Identified in the manner specified in that paragraph; and

(b) no compensation shall be payable for land referred to inparagraph (a) except for any improvements effected on such land before it was acquired.

(3) The provisions of any law referred to insection 16(1) regulating the compulsory acquisition of land that is inforce on the appointed day, and the provisions of section 18(1) and (9), shall not apply in relation to land referred to insubsection (2)(a) except for the purpose of determining any question related to the payment of compensation referred to insubsection (2)(b), that is to say, a person having any right or Interest in the land -

(a) shall not apply to a court to challenge the acquisition of the land by the State, and no court shall entertain any such challenge :

(b) may, inaccordance with the provisions of any law referred to insection 16(1) regulating the compulsory acquisition of land that is inforce on the appointed day, challenge the amount of compensation payable for any improvements effected on the land before it was acquired.

(4) As soon as practicable after the appointed day, or after the date when the land is Identified in the manner specified insubsection (2)(a)(lll), as the case may be, the person responsible under any law providing for the registration of title over land shall, without further notice, effect the necessary endorsements upon any title deed and entries in any register kept interms of that law for the purpose of formally cancelling the title deed and registering in the State title over the land.

(5) Any Inconsistency between anything contained in-

(a) a noticed itemised in Schedule 7; or

(b) a notice relating to land referred to insubsection (2)(a)(ii) or (iii);

and the title deed to which It refers or is Intended to refer, and any error whatsoever contained insuch notice, shall not affect the operation of subsection (2)(a) or Invalidate the vesting of title in the State interms of that provision.

(6) An Act of Parliament may make it a criminal offence for any person, without lawful authority, to possess or occupy land referred to in this section or other State land.

(7) This section applies without prejudice to the obligation of the former colonial power to pay compensation for land referred to in this section that was acquired for resettlement purposes.

[Section inserted by section 2 of Act 5 of 2005 - Amendment No. 17.] [emphasis added]

117.
The effect of Section 16B was to acquire and vest in the State title to every property in Zimbabwe in relation to which a Section 5 Notice had been issued on or before 8 July 2005, if the Notice was identified in Schedule 7 of the amended Constitution. The right that had previously existed to challenge the acquisition of land was removed. Section 16B(6) also criminalized the continued possession or occupation of land expropriated pursuant to the 2005 Constitutional Amendment.

E. The Claimants’ Interests in Zimbabwe

(1) The Forrester Estate

(2) The Border Estate

(3) The Makandi Estate

F. Zimbabwe’s Acquisition of the Claimants’ Estates

(1) Border Estate

140.

Section 5 Notices were issued pursuanttothe Land Acquisition Act in respect of 21 of the 28 Border Properties. Section 8 Orders were also issued in relation to a number of the Border Properties, all of which were either withdrawn by the Respondent or annulled by the local courts.

141.
On 14 September 2005, 21 of the 28 Border Properties29 were acquired by the Respondent pursuant to the Constitutional Amendment, because they were subject to at least one Section 5 Notice that was identified in Schedule 7 of the Constitution.
142.
The remaining seven properties, including the Sheba sawmill30, and the two non-plantation properties with the two factories and the pole treatment plant31, although not compulsorily acquired under the Constitution, are, however, said to be worthless now because they are not viable on their own32.
143.
The von Pezold Claimants’ (save for Adam) share capital in the Border Claimants is now also said to be worthless because the assets of the Border Companies, namely the Border Properties, have nearly all been acquired and the balance rendered worthless by the 2005 Constitutional Amendment.
144.
For the same reason, the share capital owned by Border in each of Border International and Hangani is said to be worthless.
145.
It is clear that no compensation was paid by the Government for these compulsory acquisitions.

(2) Makandi Estate

146.
Prior to the Parent Claimants acquiring an Interest in the Makandi Estate, Section 5 Notices were issued to seven of the nine Makandi Properties. All Section 8 Orders Issued against the Makandi Estate properties were either withdrawn by the Respondent or not confirmed by the courts.
147.
On 14 September 2005, six of the nine Makandi Properties were acquired by the Government pursuant to the 2005 Constitutional Amendment, because they were all subject to at least one Section 5 Notice that had been Identified in Schedule 7 of the Constitution33. Also said to have been acquired at this time are the Water Permits attaching to the Makandi Estate (see Table 3 of the Claimants’ Reply).
148.
Similar to the Border Estate, the remaining three properties34, although not compulsorily acquired under the Constitution, are said to be worthless now because they are not viable on their own.
149.
By way of the 2005 Constitutional Amendment, the Respondent is also said to have compulsorily acquired the Parent Claimants’ share acquisition rights (i.e., to acquire further shares in the Makandi Estate) (the "Makandi Acquisition Rights") for the reasons expressed above.
150.
Finally, the Parent Claimants’ share capital in the Makandi Companies is now said to be worthless because the assets of the Makandi Companies, namely the Makandi Properties, have nearly all been compulsorily acquired and the balance rendered worthless by the 2005 Constitutional Amendment.
151.
It is clear that no compensation was paid by the Government for these compulsory acquisitions.

(3) Forrester Estate

152.
Section 5 Notices were issued pursuant to the Land Acquisition Act to all ten of the Forrester Properties. Section 8 Orders were also Issued in relation to a number of the Forrester Properties, all of which were either withdrawn by the Government or annulled by the local courts.
153.
On 14 September 2005, all ten of the Forrester Properties were acquired by the Government pursuant to the Constitutional Amendment, because they were all subject to at least one Section 5 Notice that had been Identified in Schedule 7 of the Constitution. Also said to have been acquired at this time are the Water Permits attaching to the Forrester Estate (see Table 1 of the Claimants’ Reply).
154.
The von Pezold Claimants’ share capital in the Forrester Companies is now said to be worthless because the assets of the Forrester Companies, namely the Forester Properties, have been compulsorily acquired.
155.
It is clear that no compensation was paid by the Government for these compulsory acquisitions.
156.
Other assets from the Forrester Estate are also alleged to have been acquired by the Respondent, such as maize seized by the Grain Marketing Board in January 2002, for which the von Pezold Claimants say they were only partially compensated.

(4) Summary

157.

In summary, as a result of the 2005 Constitutional Amendment, all ten of the Forrester Properties (see Table 1 of the Claimants’ Memorial), 21 of the 28 Border Properties, two of which contain a sawmill (see Table 6 of the Claimants’ Memorial corrected by the Claimants in their Reply) and six of the nine Makandi Properties (see Table 10 of the Claimants’ Reply) were acquired by the Respondent. These properties are collectively referred to by the Tribunal as the "Zimbabwean Properties".

158.
In addition, according to the Claimants, the remaining seven Border Properties, one of which contains the Sheba sawmill, and two further properties with the two pole factories and the pole treatment plant (see above para. 142 and Table 6 in the Claimants’ Memorial, as corrected) and the remaining three Makandi Properties (see above para. 148) are said to be worthless since they are not viable on their own. These properties are collectively referred to as the "Residual Properties".

G. The Claimants’ Position Today

159.
According to the Claimants, all of the Estates continue to operate today as going concerns and are "thriving", although the Forrester and Border Estates continue to recover from the Invasions and the LRP, which the Claimants say has affected productivity. However, as the majority of properties on the three Estates were allegedly expropriated pursuant to the 2005 Constitutional Amendment, and the remaining properties and assets are said not to be viable on their own, the Claimants take the position that they have, ineffect, been reduced to "mere licensees at the will of the Respondent" (see Heinrich I, paras. 298, 470) and, as a result, are unable to receive any value for the Estates by way of a share or asset sale. These matters are discussed in detail below.

H. The State of Land Reform in Zimbabwe Today

160.
It is estimated that there are approximately 400 white farmers remaining in-Zimbabwe today, farming 117,409 ha of land. This may be compared to the approximately 4,500 white farmers on 4,800 large scale commercial farms, covering 11.9 million ha of land, present in-Zimbabwe in 1999. Save for a few Instances, it is not really disputed by the Parties that the majority of land farmed by white farmers was compulsorily acquired without compensation pursuant to the LRP.
161.
It is not disputed that farms acquired from white farm owners are now occupied by black farmers, senior members of the Zimbabwean Government and/or members of their families, ZANU-PF, the military and civil services. The Parties do, however, take different positions on the fairness of such land being allocated to Government officials and their families, the extent of such allocations, and the significance of this, if any, for the legality of the LRP.
162.
In 2012, a new Constitution was put to the Zimbabwean people in a referendum, and subsequently enacted Into law inearly 2013 (the "2013 Constitution") (see CLEX-331; Tr. Day 4, pp. 1190-1191). On the matter of agricultural land, addressed in Chapter 16 of the 2013 Constitution, the principles relating to compensation for land acquired by the Respondent were again changed, this time to provide expressly for the full compensation of any "Indigenous Zimbabwean" whose agricultural land was acquired, incontradistinction to the compensation of non-indigenous Zimbabweans. The 2013 Constitution also reaffirmed that foreign nationals protected by a BIT whose agricultural land had been acquired are entitled to full compensation for that land pursuant to the terms of the BIT. Specifically, Chapter 16.8 of the draft 2013 Constitution35 provided as follows:

16.8 Compensation for acquisition of previously-acquired agricultural land

(1) Any indigenous Zimbabwean whose agricultural land was acquired by the State before the effective date is entitled to compensation from the State for the land and any improvements that were on the land when it was acquired.

(2) Any persons whose agricultural land was acquired by the State before the effective date and whose property rights at that time were guaranteed or protected by an agreement concluded by the Government of Zimbabwe with the government of another country, is entitled to compensation from the State for the land and any improvements in accordance with that agreement.

(3) Any person, other than a person referred to in subsection (1) or (2), whose agricultural land was acquired by the State before the effective date is entitled to compensation from the State only for improvements that were on the land when it was acquired.

163.
During the Hearing, Ms. Tsvakwi, a fact witness for the Respondent, confirmed that an "indigenous Zimbabwean" within the meaning of the 2013 Constitution is a black farmer or black Zimbabwean (see Tr. Day 4, p. 1191).

V Issues to be Determined

164.
The issues before the Tribunal for determination may be grouped into 15 categories and are briefly summarized below. This list of issues is drawn principally from the Claimants’ identification of Issues in their Skeleton Argument. The list comprises issues in relation to both the von Pezold Claimants and the Border Claimants. No serious objection or alternative list has been advanced by the Respondent, and the Tribunal finds the below list to be comprehensive.

A. Jurisdiction: The issue of jurisdiction is comprised of at least the following questions:

(1) Does the Tribunal have jurisdiction underthe ICSID Convention?

(2) Does the Tribunal have jurisdiction over the von Pezold Claimants’ claims (save for those of Rüdiger) under the Swiss BIT?

(3) Does the Tribunal have jurisdiction over the von Pezold Claimants’ claims under the German BIT?

B. Admissibility: The issue of admissibility is comprised of the following questions:

(1) The Approvals Objection:

(a) Is the Approvals Objection an admissibility or jurisdictional issue?

(b) What is the effect of Ad Article 2(a) of the German Protocol on Article 9(b) of the German BIT?

(c) Does the Contracting Parties’ subsequent practice Inform the meaning of Article 9(b)?

(d) If approval was required, (i) what constitutes "approval" by Zimbabwe’s "competent authorities"? (ii) has such approval been given? (iii) can the von Pezold Claimants utilise the German MFN clauses to rely on the more favourable provisions of the Swiss and Danish BITs? (iv) is the Respondent estopped from denying that approval has been given?

(2) The Illegality Objection:

(a) What breaches come within the scope of the so-called "Legality Articles"?

(b) Have the Claimants committed such breaches?

(c) In any event, is the Respondent estopped from denying that the Investments were made inaccordance with applicable laws?

C. Attribution: The issue of attribution is comprised of the following questions:

(1) Are the acts of the Settlers/War Veterans attributable to the Respondent pursuant to Article 8 or Article 11 of the ILC Articles?

(2) Are the "declarations, political speeches and similar acts of communication" of government officials and the President of the Respondent attributable to the Respondent?

(3) Are "only the official acts by the State’s officials" attributable to the Respondent?

D. Proportionality, Regulation and Margin of Appreciation: The issues of proportionality, regulation and margin of appreciation are comprised of the following questions:

(1) Is the proportionality principle applicable? If so, has the Respondent acted proportionally?

(2) Is it relevant that a measure was regulatory?

(3) Is the principle of margin of appreciation applicable?

E. Expropriation: The issue of expropriation is comprised of the following questions:

(1) What is the test for direct expropriation?

(2) What is the test for Indirect expropriation?

(3) Were the following expropriated, either directly or Indirectly:

• the Water Rights (Forrester Estate)

• the Zimbabwean Properties36

• Residual Properties37, [Including] the factories, the pole treatment plant and the Sheba sawmill (Border and Makandi Estates)

• Shares and Other investments

• the Loans

• Forrester’s tobacco and its proceeds of sale

• Forrester Estate’s US Dollar bank deposits from tobacco sales

• Border Estate’s US Dollar export proceeds

• US Dollars from Border’s account

• Makandi Acquisition Rights

(4) Were any of the expropriations carried out for (a) a public purpose, (b) in a non-discriminatory manner; and (c) with due process?

F. Fair and Equitable Treatment: The issue of Fair and Equitable Treatment ("FET") gives rise to the following questions:

(1) Is the FET standard in the German and Swiss BITs equivalent to the customary international law minimum standard of treatment?

(2) What is the content of the FET standard in (a) the German BIT; and (b) the Swiss BIT?

(3) Does Ad Article 3(a) of the German Protocol (CLEX-3) exclude certain conduct from the FET standard?

(4) Has the FET standard been breached in regard to the application of:

• new legislation to the Forrester Water Rights?

• the LRP to the Zimbabwean Properties38 and shares in the Zimbabwean Companies?

• the foreign exchange policy to the loans?

• the foreign exchange policy to the proceeds of the sales?

(5) To what extent are legitimate expectations relevant to the Claimants’ causes of action?

(6) What is the relationship between legitimate expectations, business risk and political risk?

(7) What were the Respondent’s assurances and the legitimate expectations they engendered?

(8) Is a balancing required between the Claimants’ legitimate expectations and the "Common Interest of the Zimbabwean People"? If so, what is the relevance and result of this balancing exercise to the Claimants’ causes of action?

G. Non-Impairment: The issue of non-impairment gives rise to the following questions:

(1) What amounts to unreasonable, discriminatory or arbitrary measures under the non-impairment standard in the German and Swiss BIT respectively?

(2) Have such measures from the Respondent Impaired the management, maintenance, use, enjoyment or disposal of the Claimants’ Investments?

H. Full Protection and Security: The issue of Full Protection and Security ("FPS") gives rise to the following questions:

(1) What is the scope of the FPS standard in(a) the German BIT; and (b) the Swiss BIT?

(2) Is the Respondent inbreach of either FPS standard?

(3) Are there circumstances which curtail the Respondent’s obligations pursuant to the FPS standards?

(4) What is the Respondent’s obligation under section 18 of the Constitution?

I. Free Transfer of Payments: The issue of Free Transfer of Payments ("FTS") gives rise to the following questions:

(1) What is the scope of the free transfer standard in (a) the German BIT; and (b) the Swiss BIT?

(2) Has the Respondent breached either standard?

J. Necessity: The issue of necessity gives rise to the following questions:

(1) Was the LRP a Non-Precluded Measure because of necessity?

(2) If so, what is the effect of this defence if successfully invoked?

K. Causation: The issue of causation gives rise to the following question:

(1) in the event the Claimants suffered a loss as a result of any of the above alleged treaty breaches, did the Respondent cause the Claimants’ losses?

L. Remedies: The issue of remedies (if liability and causation are decided in favour of the Claimants) is comprised of the following questions:

(1) Restitution

• Under what circumstances will restitution be ordered?

• Is restitution mandatory because of the special circumstances of these cases?

• Would an award of restitution give rise to a (or the return of a) state of emergency in-Zimbabwe?

• If so, should restitution be awarded?

(2) Compensation

• What is the standard of compensation and date of assessment for:

• lawful expropriation; and

• unlawful expropriation and non-exproprlatory breaches

• What is the most appropriate valuation method to be applied?

• Has the method been applied accurately?

• What matters are to be disregarded when assessing compensation?

• Did the Respondent’s breaches cause the Claimants’ losses?

• Are moral damages due?

• What amount of compensation is due?

• Is the Respondent’s ability to pay damages relevant?

• Is the Claimants’ alleged failure to mitigate their losses relevant?

• When is compensation due?

M. Interest: The issue of Interest is comprised of the following questions:

(1) What rate of Interest is due on any sums determined to be payable?

(2) Is Interest to be compound or simple?

(3) Over what period is Interest payable?

N. Declaratory Relief: The issue of declaratory relief requires the Tribunal to consider whether the Claimants are entitled to the declarations set out in their Corrected Request for Relief, dated 10 May 2013; and

O. Costs: Finally, the issue of costs requires the Tribunal to consider the reasonableness of the costs claimed and the appropriate allocation (If any) of the costs of these arbitration proceedings as between the Parties.

VI Parties’ Positions, Tribunal’s Analysis & Findings

165.
The Tribunal shall now discuss and determine each of these issues inturn.
166.
The Parties’ written and oral submissions in these arbitrations are extensive, as explained above. The Tribunal has, where convenient, reproduced or summarized parts of those submissions in the body of the Award; however, it is not possible to Incorporate the entirety of the Parties’ submissions, both written and oral, made in the course of these proceedings. The Tribunal has nonetheless considered the full submissions of the Parties in identifying the principal issues and in arriving at its decisions on those issues in this Award.

A. Preliminary Matters

167.
Before turning to the specific issues identified above, the Tribunal wishes to address certain preliminary matters, including: (1) the law applicable to the merits of the present disputes; (2) the allocation of the burden of proof; and (3) the standard of proof.

(1) Applicable Law

168.
Article 42 of the ICSID Convention states, in relevant part, as follows:

(1) The Tribunal shall decide a dispute in accordance with such rules of law as may be agreed by the parties. In the absence of such agreement, the Tribunal shall apply the law of the Contracting State party to the dispute (including its rules on the conflict of laws) and such rules of international law as may be applicable.

169.
The present dispute, in the context of the von Pezold arbitration (ICSID Case No. ARB/10/15), has been submitted to arbitration pursuant to the Swiss BIT and the German BIT. The present dispute, in the context of the Border arbitration (ICSID Case No. ARB/10/25), has been submitted to arbitration pursuant to the Swiss BIT only.
170.
Article 10(3) of the Swiss BIT provides that "[t]he arbitral tribunal shall decide on the basis of the present Agreement and other relevant agreements between the Contracting Parties; the terms of any particular agreement that has been concluded with respect to the investment; the law of the Contracting State party to the dispute, including its rules on the conflict of laws; such rules of international law as may be applicable".
171.
Article 11(2) of the German BIT provides that "[t]he arbitral tribunal constituted pursuant to the said Convention shall reach its decisions on the basis of this Agreement, any treaties in force between the Contracting Parties, such rules of general international law as may be applicable, and the domestic law of the Contracting Party in the territory of which the Investment inquestion is situated".
172.
The Tribunal will revert to the applicable law and, in particular, the application of Zimbabwean law, where appropriate, in its discussion of the issues below.

(2) Burden of Proof

173.
The Parties have addressed the Tribunal on burden of proof in the particular context of jurisdiction. However, the same principles as discussed below apply mutatis mutandis to the Parties’ respective positions advanced on the merits of the case as well.

(3) Standard of Proof

B. Jurisdiction under the ICSID Convention

(1) Introduction

179.
Article 25 of the ICSID Convention provides as follows:

Article 25

(1) The jurisdiction of the Centre shall extend to any legal dispute arising directly out of an investment, between a Contracting State (or any constituent subdivision or agency of a Contracting State designated to the Centre by that State) and a national of another Contracting State, which the parties to the dispute consent in writing to submit to the Centre. When the parties have given their consent, no party may withdraw its consent unilaterally.

(2) "National of another Contracting State" means:

(a) any natural person who had the nationality of a Contracting State other than the State party to the dispute on the date on which the parties consented to submit such dispute to conciliation or arbitration as well as on the date on which the request was registered pursuant to paragraph (3) of Article 28 or paragraph (3) of Article 36, but does not include any person who on either date also had the nationality of the Contracting State party to the dispute; and

(b) any juridical person which had the nationality of a Contracting State other than the State party to the dispute on the date on which the parties consented to submit such dispute to conciliation or arbitration and any juridical person which had the nationality of the Contracting State party to the dispute on that date and which, because of foreign control, the parties have agreed should be treated as a national of another Contracting State for the purposes of this Convention.

180.
There are, essentially, four elements that must be satisfied to establish jurisdiction under Article 25:

• A legal dispute;

• Arising directly out of an Investment;

• Between a Contracting State and a national of another Contracting State; and

• Consent in writing to submit the dispute to the Centre.

181.
Each element is discussed in detail below.

(2) The Existence of the Legal Dispute

(i) Respondent’s Position

182.
The Respondent does not appear to question that the disputes between the Parties are properly characterized as legal disputes for the purposes of jurisdiction. The Respondent does, however, present a different characterization of the disputes and, in particular, a different narrative surrounding the nature and purpose of the LRP than that presented by the von Pezold and Border Claimants. For example, the Respondent stated in its Counter-Memorial (see CM, paras., 57-71):

The Land Reform Programme was and remains a genuine exercise for the redistribution of land and the resettlement of the landless majority. As will be observed from the afore going land to be redistributed was owned by white people and it is from them that it had to be taken for redistribution to the landless blacks.

The Impatience of the landless masses reached boiling point In 2000 resulting in Invasions which coincided with the rejection of the Draft Constitution. The invasions were never a policy nor were they an integral part of the Land Reform and Resettlement Programme as alleged by the Claimants in paragraphs 550 and 554 of the Memorial, but were a spontaneous reaction by the landless people. The Draft Constitution contained provisions relating to the acquisition of land for resettlement and placed the onus for providing compensation for the acquired farms on the former colonial power. The Government of Zimbabwe would now pay for infrastructural improvements on the land but not for the land itself.

When the Constitution was rejected it was yet another blow to the expectations of those who had sacrificed their lives for the return of land to the black people, the Liberation War Veterans (War Vets). It was now 20 years after gaining independence and there was little to show in terms of access to land for the majority of Zimbabweans.

The reasons for the rejection of the Draft Constitution were more political than anything else. They were not a rejection of the need for redistribution of land. The Fast Track Programme was accordingly launched on the 15th of July 2000. The acquisition of land and the resettlement of people was now to be undertaken in an accelerated manner with reliance on domestic resources.

The purpose of the Fast Track was to:

• Speed up the identification of land for compulsory acquisition. The target was not less than 5 million hectares of land for resettlement

• Accelerate the planning and demarcation of acquired land for resettlement

• Provide basic infrastructure (boreholes, dip tanks and access roads) and farmer support services (tillage and agricultural inputs)

• Simultaneously resettle people in all provinces to ensure that the reform programme was comprehensive and evenly implemented

• Provide secondary infrastructure such as schools, clinics and rural service centres.

During this Phase, land was acquired on a compulsory basis in accordance with the Land Acquisition Act [Chapter 20:10] as amended....

Initially, Government laid down a framework under which farms once gazetted for acquisition could be de-listed for valid reasons, for example, if the farms were plantation farms in the large scale production of tea, coffee, timber, citrus, sugar cane etc. Also included were agro- industrial properties involved in integrated production, farms in Export Processing Zones, farms belonging to church or mission organizations, conservancies and farms belonging to foreign nationals who are protected by BIPPAs.

Despite this goodwill on the part of Government some farm owners abused the delisting framework in a bid to frustrate the land reform process. Some farmers deliberately changed land use to avoid compulsory acquisition of their farms. For example some farmers shared their dairy cattle in order to be exempted. Others introduced wildlife onto agricultural land.

Former farm owners also made the process of land acquisition long and cumbersome. Because the Land Acquisition Act required the serving of notices to the owner and confirmation of acquisition through the Administrative Court, the former owners mounted all sorts of legal challenges including wrong citation of their names or companies to frustrate the acquisition.

These challenges slowed down the acquisition and resettlement process to a snail’s pace. The court processes were now blocking meaningful progress in the Land Reform Programme. It became necessary to promulgate a law that promoted the goals and purposes of land reform in the Republic, a historical mandate (paragraph 552 Memorial). The Constitutional Amendment No 17 of 2005 was enacted to meet this need. It provided for compulsory acquisition of agricultural land without recourse to the courts save for Issues of compensation for Improvements.

The acquisition of nearly 11 million hectares from the previous 3, 5 million (by 2000) can be attributed to this change in the law. Overall over 14 million hectares have been acquired for resettlement to date and 145 775 A1 and 18 289 A2 beneficiaries resettled thereon. The most Important goal of redressing the thorny reality of historical Inequities inland ownership has been substantially achieved.

183.
The Respondent thus frames the disputes with the von Pezold and Border Claimants in the context of a historical narrative arising out of Zimbabwe’s colonial past.

(ii) Claimants’ Position

184.
The von Pezold and Border Claimants, by contrast, have described the background to the Parties’ dispute as follows (see Cl. Skel., paras. 2, 5-8):

2. Zimbabwe’s War of Independence ended in 1980. The Government subsequently encouraged reconciliation and foreign Investment, including Investment from the Claimants. During the period 1980 to 2000, 70% of all farms that existed at Independence had been bought and sold in the open market or purchased by the Respondent at the fair market value.

5. After Independence, land reform was a low priority for the Government. The Government’s stated policy under the Land Reform Programme ("LRP") was to acquire no more than 8.3 million ha of the 15.5 million ha of commercial farm land (the great majority of which was owned by white Zimbabweans). As at 2000, it had acquired only 3.66 million ha. The post 2000 phases of the LRP are collectively referred to as the "aggressive phases".

6. From 2000 onward, the LRP had the aim of removing every white farmer from his or her land. In simple terms it was racist, breaching the prohibition against discrimination on grounds of race or colour - a peremptory norm of general International law. It also had the aim of allocating farms that had been expropriated to senior members of the government, ZANU-PF and the military and civil services. In particular, in-February 2000, after losing a referendum (blamed on the white vote), the Respondent Instigated the Invasion of commercial farms. If It did not Instigate them then shortly after they commenced, it took control of them and encouraged them. The Invasions became an Integral part of the LRP. In July 2000, the Respondent commenced Phase II, Fast Track of the LRP. Pursuant to this phase, the Respondent Issued thousands of s5 Notices Identifying properties for expropriation. However, the courts held that many of the s5 Notices were Invalid. On 14 September 2005, the Respondent enacted s16B of the Constitution ("the Constitutional Amendment"). The effect of the Constitutional Amendment was to expropriate the farms of nearly every white farmer in-Zimbabwe (of the 4,500 white farmers farming in 2000, today there are less than 200 whose farms have not been expropriated). Most of the Claimants’ properties have been expropriated pursuant to the Constitutional Amendment.

7. The economic decline caused by the aggressive phases of the LRP led the Respondent to introduce a perverse foreign exchange policy, which has caused the Claimants significant losses. The Respondent’s own courts have stated that the foreign exchange obtained through this policy was used by the Government for illegal purposes.

8. In parallel with the LRP, and indeed during it, the Respondent ratified a number of BITs, including the German BIT on 14 April 2000 (provisional entry into force was 18 September 1996) and the Swiss BIT on 9 February 2001. Property and compensation rights protected by BITs were given a special status under Zimbabwean law when s16(9b) of the Constitution was enacted in 1996. Further, the Government’s LRP policy expressly excluded from expropriation properties covered by BITs, together with tea, coffee, timber and citrus plantations. On numerous occasions the Respondent acknowledged that the Claimants’ investments were covered by the BITs, and stated that they would not be subjected to the LRP. Nevertheless, despite the Respondent stating in 2005, by way of a Note Verbale, that the Constitutional Amendment had not expropriated the Claimants’ investments (and thereby confirming prior assurances), in 2007 the Respondent stated that they had been expropriated by the Constitutional Amendment. The Claimants accept that they have been expropriated.

185.
The von Pezold Claimants (save for Rüdiger) and the Border Claimants present their "Main Claims" (i.e., those claims raised in the Memorial) as claims arising from the Implementation of the LRP. They allege breaches of the Swiss BIT, customary International law and domestic law that have caused them to suffer damage. The von Pezold Claimants also allege breaches of the German BIT that have caused them to suffer damage, and Rüdiger also alleges breaches of customary International law. The von Pezold Claimants allege the breach of the expropriation standard, the FET standard, the non-impairment standard, the FPS standard and the FTP standard of the Swiss BIT (save for Rüdiger) and the German BIT, and breach of the Impairment or diminishment standard of the Danish BIT through the most-favoured nation ("MFN") provisions of the Swiss and German BITs (see above para. 88, the von Pezold Claimants’ Request for Relief). The Border Claimants allege the same breaches of the Swiss BIT, customary International law and domestic law as the von Pezold Claimants.
186.
The Parties’ dispute in connection with the von Pezold Claimants’ "Additional Claims" (i.e., those claims raised after submission of the Memorial and relating to water rights and permits) are raised solely under the German BIT39. The first Additional Claim relates to water rights which attached to the Forrester Estate (the "Water Rights") (see Reply, paras. 430-433, a list of the von Pezold Claimants’ Water Rights - Forrester Estate is reproduced in the Claimants’ Reply, Table 1. This table is reproduced as Annex D to the Operative Part of the present Award):

Under the Water Act 1976, and its predecessors, the right to use "public water" for agricultural purposes, attached to the majority of the Forrester Properties and vested in the von Pezold Claimants. These rights to use public water are referred to as "Water Rights". No charge was levied by the Respondent on the holders of Water Rights for the consumption of water, and once granted in their final form they were not to expire.

However, upon the commencement in January 2000 of the Water Act 1998 and the Zimbabwe National Water Authority Act 1998 (the "ZNWA Act"), the regulatory regime for the use of water changed significantly.

Pursuant to the Water Act 1998, Water Rights have been converted into "permits" ("Permits"). Permits to use water only last for a period of twenty years. Moreover, pursuant to the ZNWA Act, the Respondent is empowered to, and does in fact, charge significant amounts for water consumed for agricultural purposes.

187.
The von Pezold Claimants allege that the Forrester Water Rights were directly expropriated by the Respondent on 1 January 2000 by the repeal of the Water Act 1976 and the commencement of the Water Act 1998 and, in particular, section 124 of the Water Act 1998 which extinguished all Water Rights (replacing them Instead with Water Permits). In the alternative, the von Pezold Claimants allege that, as a matter of customary International law and Article 4(2) of the German BIT, the Water Rights were Indirectly expropriated by the Respondent on 1 January 2000 by the repeal of the Water Act 1976 and the commencement of the Water Act 1998, in that the rights that exist under a Water Permit are so different and much-diminished from those that existed under a Water Right that the overall effect has been to cause a radical deprivation to the economical use and enjoyment of the von Pezold Claimants’ right to use public water on the Forrester Estate (see Reply, paras. 530-533). As well as compensation for the conversion of the Forrester Water Rights into Water Permits in the year 2000, the von Pezold Claimants also seek restitution of the resulting Water Permits (hereinafter referred to as the "Forrester Water Permits") (see Reply, para. 559). These Forrester Water Permits, as with the Makandi Water Permits discussed below, were allegedly expropriated along with the Forrester Properties pursuant to the 2005 Constitutional Amendment. The von Pezold Claimants therefore seek restitution of the Forrester Water Permits along with the Forrester Properties (see von Pezold Claimants’ Corrected Request for Relief, para 8.12.1)40.
188.
The second Additional Claim relates to alleged expropriation of the Water Permits (created under the Water Act 1998) which attached to the Makandi Estate ("Makandi Water Permits") (see Reply, paras. 561-562). The von Pezold Claimants allege that the Makandi Water Permits were exporopriated when the Makandi Properties were expropriated pursuant to the 2005 Constitutional Amendment. Unlike the Forrester Water Rights, the von Pezold Claimants do not bring a claim for expropriation of the Makandi Water Rights (through conversion into Water Permits In 2000) because they did not own a qualifying Interest in the Makandi Estate at that time:

At the time that the Parent Claimants acquired their contractual and beneficial rights in the Makandi Estate in May 2005, the Water Rights that previously existed in relation to the Makandi Estate had already (in 2000) been converted into Permits.... Therefore the Claimants do not make any claims in relation to those prior Water Rights.

However,..., the Parent Claimants in seeking the restitution of the Makandi Properties also seek the restitution of the final Permits attaching to them. Without access to water through the Permits, the Parent Claimants will incur significant losses.

189.
The Parent Claimants contend that the Water Permits are part of the Makandi Estate as they attached to the Makandi Properties as at the date the Parent Claimants obtained their Interest in the Makandi Estate (see Reply, para. 563, a list of the von Pezold Claimants’ Water Permits -Makandi Estate is reproduced in the Claimants’ Reply, Table 3. This table is reproduced as Annex E to the Operative Part of the present Award).

(iii) The Tribunal’s Analysis

190.
As noted above, fulfillment of the first element of Article 25 of the ICSID Convention, the existence of a legal dispute, is not contested. Simply put, the Parties’ disputes in connection with the Main Claims arise from the Implementation of the LRP and, in particular, from the enactment of provisions of the 2005 Constitutional Amendment. The dispute in connection with the "Additional Claims" arises from a change in the legal regime governing water rights, I.e. the Water Act 1976.
191.

The Tribunal finds that this first element of Article 25 is satisfied in respect of both the von Pezold and Border Claimants.

(3) Consent in Writing under the ICSID Convention

192.
The Tribunal turns next to the fourth element of the Article 25 test, regarding consent, inview of the prominence of this element among the Respondent’s objections.

(i) Respondent’s Position

193.
The main thrust of the Respondent’s various jurisdictional objections is that it did not consent to the arbitration of the Claimants’ claims in connection with the above disputes. The Respondent takes this position on the basis of its Interpretation of the relevant BITs, as discussed indetail below.

(ii) Claimants’ Position

194.
The Claimants’ expression of consent, detailed below, is said to be predicated on the advance consent extended by the Respondent in the dispute settlement provisions of the German and Swiss BITs.
195.
The von Pezold Claimants state that they have expressed their consent to ICSID arbitration in at least two ways. First, in a letter dated 9 November 2009, addressed to the Zimbabwean Minister of Economic Planning and Investment Promotion (delivered on 30 November 2009) and the Zimbabwean Minister of Finance (delivered on 11 December 2009), each of the von Pezold Claimants (except Adam) through their counsel consented to submit the present legal dispute to ICSID arbitration. By letter dated 2 March 2010, addressed to the Zimbabwean Minister of Economic Planning and Investment Promotion (delivered on 17 March 2010) and the Zimbabwean Minister of Finance (delivered on 17 March 2010), Adam, through counsel, consented to submit the present legal dispute to ICSID arbitration. Second, in their Request for Arbitration, filed on 10 June 2010, the von Pezold Claimants restated and "ratified" their consent to submit the present legal dispute to ICSID arbitration (see Request for Arbitration, 10 June 2010, paras. 105-107; see also Reply, para. 505).
196.
The Border Claimants similarly state that they have expressed their consent to submit the present legal dispute to ICSID arbitration in their Request for Arbitration, filed on 3 December 2010 (see Request for Arbitration, 3 December 2010, para. 95).
197.
Accordingly, the Claimants take the position that:

• the date on which the parties in Case No. ARB/10/15 consented to submit their dispute to ICSID arbitration is 30 November 2009 (17 March 2010 for Adam) at the earliest, or as of the date of filing of the Request for Arbitration (i.e., 10 June 2010) at the latest (see Request for Arbitration, 10 June 2010, para. 108); and

• the date on which the parties in Case No. ARB/10/25 consented to submit their dispute to ICSID arbitration is 3 December 2010, the date on which the Border Claimants filed their Request for Arbitration (see Request for Arbitration, 3 December 2010, para. 96).

(iii) The Tribunal’s Analysis

198.
It is clear that the von Pezold Claimants and the Border Claimants have consented to the arbitrations. Both the German and Swiss BITs provide, in their respective dispute settlement provisions, that the Contracting Parties consent to submit disputes meeting certain criteria to arbitration under the ICSID Convention If they are not settled within six months of the date on which they were raised. Specifically, the dispute settlement provisions of the German and Swiss BITs provide as follows:

Article 11 of the German BIT

(1) Disputes between a Contracting Party and a national or company of the other Contracting Party concerning an investment of such national or company in the territory of the former Contracting Party shall as far as possible be settled amicably between the parties concerned.

(2) If the dispute is not settled within six months of the date when it is raised by one of the parties in dispute, it shall, at the request of the national or company concerned, be submitted for arbitration. Each Contracting Party hereby consents to submit the dispute to arbitration. Unless the parties in dispute agree otherwise, the dispute shall be submitted for arbitration under the Convention on the Settlement of Investment Disputes between States and Nationals of other States of 18th March, 1965. The arbitral tribunal constituted pursuant to the said Convention shall reach its decisions on the basis of this Agreement, any treaties to force between the Contracting parties, such rules of general international law as may be applicable, and the domestic law of the Contracting Party in the territory of which the investment in question is situated.

(3) The award shall be binding on the parties and shall not be subject to any appeal or remedy other than that provided for in the said Convention. The award shall be enforced in accordance with the domestic law of the Contracting Party in the territory of which the investment in question is situated.

(4) During arbitration proceedings or proceedings for the enforcement of an award, the Contracting Party involved in the dispute shall not raise the objection that the national or company concerned has received compensation under an insurance contract in respect of all or part of his or its damage or losses.

Article 10 of the Swiss BIT

(1) For the purpose of solving disputes with respect to investments between a Contracting Party and an investor of the other Contracting Party and without prejudice to Article 11 of this Agreement (Disputes between Contracting Parties), consultations will take place between the parties concerned.

(2) If these consultations do not result in a solution within six months and if the investor concerned gives written consent, the dispute shall be submitted to the arbitration of the International Centre for Settlement of investment Disputes, instituted by the Convention of Washington of March 18, 1965, for the settlement of disputes regarding investments between States and nationals of other States.

Each party may start the procedure by addressing a request to that effect to the Secretary-General of the Centre as foreseen by Article 28 and 36 of the above-mentioned Convention. Should the parties disagree on whether conciliation or arbitration is the most appropriate procedure, the investor concerned shall have the final decision.

(3) The arbitral tribunal shall decide on the basis of the present Agreement and other relevant agreements between the Contracting Parties; the terms of any particular agreement that has been concluded with respect to the investment; the law of the Contracting State party to the dispute, including its rules on the conflict of laws; such rules of international law as may be applicable.

(4) The Contracting Party which is a party to the dispute shall not at any time during the procedures assert as a defence its immunity or the fact that the investor has received compensation under an insurance contract covering the whole or part of the incurred damage or loss.

(5) Neither Contracting Party shall pursue through diplomatic channels a dispute submitted to the arbitration of the Centre unless the other Contracting party does not abide by and comply with the award rendered by the arbitral tribunal.

(6) The arbitral award shall be final and binding for the parties involved in the dispute and shall be enforceable in accordance with the laws of the Contracting Party in which the investment in question is located.

199.
Based on the foregoing provisions, it is equally clear that the Respondent has consented through the BITs, provided the relevant criteria are satisfied. The Tribunal so finds. The relevant criteria are discussed below.

C. Jurisdiction Ratione Personae

(1) The ICSID Convention

(i) Article 25(2)(a)

200.
The Tribunal recalls that Article 25(2) of the ICSID Convention, which defines a national of another Contracting State for purposes of establishing jurisdiction, provides as follows:

2) "National of another Contracting State" means:

(a) any natural person who had the nationality of a Contracting State other than the State party to the dispute on the date on which the parties consented to submit such dispute to conciliation or arbitration as well as on the date on which the request was registered pursuant to paragraph (3) of Article 28 or paragraph (3) of Article 36, but does not Include any person who on either date also had the nationality of the Contracting State party to the dispute; and

(b) any juridical person which had the nationality of a Contracting State other than the State party to the dispute on the date on which the parties consented to submit such dispute to conciliation or arbitration and any juridical person which had the nationality of the Contracting State party to the dispute on that date and which, because of foreign control, the parties have agreed should be treated as a national of another Contracting State for the purposes of this Convention.

201.
The von Pezold Claimants evidence their nationality for the purpose of satisfying Article 25(2)(a) by reference to their German and Swiss passports and national Identity cards, the details of which are provided at para. 87 of the 10 June 2010 Request for Arbitration41. All of the von Pezold Claimants, save for Rüdiger, claim to be nationals of both Germany and Switzerland. Rüdiger claims to be a national of Germany.
202.

In its Counter-Memorial, the Respondent admitted that all of the von Pezold Claimants, save for Rüdiger, are nationals of both Germany and Switzerland and that Rüdiger is a national of Germany. The Respondent also stated, however, that documents filed with Company House in-Zimbabwe Indicated that Heinrich von Pezold ("Heinrich") and Rüdiger were Zimbabwean citizens (see CM, para. 5).

203.
The Respondent did not pursue this allegation in its subsequent pleadings, although in its Post-Hearing Brief it raised the matter again in the form of a misrepresentation argument.
204.
In their Reply, the Claimants denied that Heinrich or Rüdiger has ever been a Zimbabwean citizen and explained that the documents relied upon by the Respondent reflected clerical errors made by the accountants who had filed them (see Reply, paras. 14-15). All of the von Pezold Claimants have also stated that none of them are Zimbabwean nationals (see Request for Arbitration, 10 June 2010, para. 114).
205.
The Tribunal is satisfied on its review of the evidence that each of the von Pezold Claimants fulfils the nationality criteria under Article 25(2)(a) and the Tribunal therefore has jurisdiction ratione personae over the von Pezold Claimants under the ICSID Convention.

(ii) Article 25(2)(b)

a) Respondent’s Position

206.
The Respondent has asserted that Elisabeth’s control of the Border Claimants is inadequate for the purpose of Article 25(2)(b) of the ICSID Convention, because it is indirect, and therefore the Border Claimants do not satisfy the nationality criteria of Article 25 of the ICSID Convention.
207.

The Respondent relies on the decisions in AMCO Asia Corporation & Others v. Indonesia ("Amco Asia") (see ICSID Reports 389, Decision on Jurisdiction, 25 September 1983, CLEX-392) and Tradex Hellas SA v. Republic of Albania (Tradex) (see ICSID Case No. ARB/94/2, Award, 29 April 1999, RLEX-11) for the proposition that indirect control does not constitute foreign control for the purposes of the Centre’s jurisdiction (see Rejoinder, paras. 937-938). The Respondent notes that in AMCO Asia there were five degrees of intermediate control as between the putative foreign investor and the local entity, and here the "Claimants need even more than ten organograms to try to prove their control of the local companies" (see Rejoinder, para. 938). The Respondent also refers to the following passage in the Tradex award, a case which the Respondent contends presented a similar situation to the one in these cases (see Rejoinder, para. 939; Resp. Skel., para. 55, quoting Tradex, para. 118, RLEX-11):

In its summary of the Investments it claims to have made (particularly in T III p. 7 seq.), Tradex mentions a number of Investments not in Albania, but in other countries allegedly in favour of the Joint Venture. In this context, the Tribunal notes that, according to Art. 1(3) of the 1993 Law, only those Investments qualify to be covered by that Law that are made ‘in the territory of the Republic of Albania’. In principle, therefore, Investments made by Tradex outside Albania do not qualify.

208.
In its Rebutter (see Rebutter, para. 222), the Respondent referred to the tribunal’s summary of the elements required to establish foreign control for ICSID jurisdiction in Autopista Concesionada de Venezuela CA v. Bolivarian Republic of Venezuela ("Autopista")(see ICSID Case No. ARB/00/15, Decision on Jurisdiction, CLEX-189):

The cases decided under Article 25(2)(b) establish that the "foreign control" referred to in the second clause of Article 25(2)(b) means foreign control by nationals of a Contracting State party to the Convention. Moreover, such "foreign control" must meet an objective standard (Vacuum Salt Products Ltd. v. Government of the Republic of Ghana (Case No. ARB/92/1) Award of February 16, 1994, 4 ICSID Reports 165 (1994), Ven. Auth. 9). As a result, an arbitral tribunal must take into account the true control relationship (Banro American Resources, Inc. and Société Aurifère du Kivu et du Maniema, SARL v. the Democratic Republic of Congo (Case No. ARB/98/7), Award Declining Jurisdiction of September 1, 2000, Ven. Auth. 2; LETCO, Ven Auth. 6; SOABI, Ven Auth. 8, Christopher Schreuer, Commentary on the ICSID Convention, 12 ICSID Review -FILJ 59 (1997) (Second Installment of Commentaries Discussing Article 25), 560, 562-563, Ven. Auth. 11).

209.

The Respondent also referred to the tribunal’s discussion of control in Vacuum Salt Products Ltd. v. Republic of Ghana ("Vacuum Salt") (see ICSID Case No. ARB/92/1, Award, 16 February 1994, CLEX-177) as follows (see Rebutter, para. 225, quoting Vacuum Salt)-.

The Tribunal notes, and itself confirms, that "foreign control" within the meaning of the second clause of Article 25(2)(b) does not require, or imply, any particular percentage of share ownership. Each case arising under that clause must be viewed in its own particular context, on the basis of all of the facts and circumstances. There is no "formula." It stands to reason, of course, that 100 percent foreign ownership almost certainly would result inforeign control, by whatever standard, and that a total absence of foreign shareholding would virtually preclude the existence of such control. How much is "enough," however, cannot be determined abstractly. Thus, in the course of the drafting of the Convention, it was said variously that "Interests sufficiently Important to be able to block major changes in the company" could amount to a "controlling Interest" (Convention History, Vol. 11, 447); that "control could in fact be acquired by persons holding only 25 percent of' a company's capital (id., 447-48); and even that "51% of the shares might not be controlling" while for some purposes "15% was sufficient" (Id., 538).

210.
The Respondent concludes that control is a "clearly defined chain, each link of which meets the applicable legal standard" and that the Claimants "have not demonstrated that continuous chain as there [sic] holdings and organograms are wilfully untraceable, probably for tax reasons." (see Rebutter, para. 223).

b) Claimants’ Position

211.

The Claimants submit that control requires consideration of all facts and circumstances, relying on Vacuum Salt42, and that Indirect control may be control for the purpose of Article 25(2)(b) of the ICSID Convention (see Cl. Skel., para. 13; Cl. PHB, para. 14). The Claimants rely on Socíété Ouest Africaine des Bétons Industriéis (SOABI) v. Republic of Senegal (SOABI) (see 2 ICSID Reports 165, Decision on Jurisdiction, 1 August 1984, CLEX-393) and Mobil Corporation, Venezuela Holdings, B.V. and others v. Bolivarian Republic of Venezuela ("Mobil") (see ICSID Case No. ARB/7/27, Decision on Jurisdiction, 10 June 2010, CLEX-410) in support of their latter point that indirect control is sufficient for the purpose of Article 25(2)(b) of the ICSID Convention. The following quote from SOABI is emphasized by the Claimants (seeSOABI, paras. 35-37, CLEX-393):

The nationality of this company, which held in 1975 all of SOABI’s subscribed capital shares, could only be determinative of the nationality of the foreign Interests if the Convention were concerned only with direct control of the company. However, the Tribunal cannot accept such an Interpretation, which would be contrary to the purpose of Article 25(2)(b) infine. This purpose, it is hardly necessary to observe, is to reconcile, on the one hand, the desire of States hosting foreign Investments to see those Investments managed by companies established under local law and, on the other hand, their desire to give those companies standing in ICSID proceedings.

SOABI is a perfect example of this, being a company established under Senegalese law to which the capacities of a national of another Contracting State have been granted.

It is obvious that, just as a host State may prefer that Investments be channelled through a company Incorporated under domestic law, Investors may be led for reasons of their own to Invest their funds through Intermediary entitles while retaining the same degree of control over the national company as they would have exercised as direct shareholders of the latter.

212.
The Claimants also point to the Mobil tribunal’s discussion of Article 25(2)(b) as follows (see Surrejoinder, para. 127, quoting Mobil, paras. 153, 154 and 157, CLEX-410):

The Tribunal observes that Venezuela Holdings (Netherlands) owns 100 % of its US and Bahamian subsidiaries. Those subsidiaries are thus controlled directly or indirectly by a ‘legal person constituted under the law’ of the Netherlands. Accordingly they must be deemed to be Dutch nationals under article 1 (b) (iii) of the BIT.

The Respondent submits however, that this article is Incompatible with Article 25 (2) (b) of the ICSID Convention which, according to Venezuela, excludes the use of the control test for the determination of a corporation’s nationality.

However Article 25(2)(b)(l) does not Impose any particular criteria of nationality (whether place of Incorporation, siege social or control) in the case of juridical persons not having the nationality of the Host State. Thus the parties to the Dutch-Venezuela BIT were free to consider as nationals both the legal persons constituted under the law of one of the Parties and those constituted under another law, but controlled by such legal persons. The BIT is thus compatible with Article 25 of the ICSID Convention.

213.
The Claimants distinguish Amco Asia on the basis that there was no agreement in that case concerning control as there is here in the form of Article 1(1)(c) of the Swiss BIT (see Cl. Skel., para. 13). The Claimants also submit that to the extent Amco Asia purports to limit the examination of control to the company immediately above the company incorporated in the host State, it was wrongly decided and has not been followed, as evidenced by the cases discussed above. Moreover there is nothing in the second limb of Article 25(2)(b) which indicates that such a restriction is required (see Surrejoinder, para. 120). The Claimants also point to the testimony of Mr. Moyo who admitted that, in Zimbabwe, property is often held through companies (see Cl. PHB, para. 15, referring to Tr. Day 6, p. 1618, lines 18-21).
214.
Finally, the Claimants contend that the Respondent’s reliance on Autopista to argue the opposite conclusion is misplaced, averring that the tribunal in that case did not decide that control could, as a general matter, only be by way of direct control (see Cl. Skel., para. 13).

c) The Tribunal’s Analysis

215.

The Tribunal is satisfied on its review of the evidence, and in particular that of Elisabeth and Heinrich, that the Border Claimants satisfy the criteria of Article 25(2)(b) on the basis of foreign control. The Tribunal rejects the Respondent’s suggestion that the "chain of control" is broken in this case because of the presence of intermediary companies through which the von Pezolds’ interest in the Border Claimants is held. The evidence clearly demonstrates that Elisabeth exercises overall control of the Border Companies and that Rüdiger, the Adult Children Claimants and Adam abide by Elisabeth’s exercise of ultimate control over those companies. Accordingly, the Tribunal finds that the requirements of Article 25(2)(b) of the ICSID Convention have been met and that it has jurisdiction ratione personae over the Border Claimants under the ICSID Convention.

(2) The BITs

(i) Respondent’s Position

216.
The Respondent disputes that the Border Claimants are "controlled" by any of the Swiss von Pezold Claimants, but it does so by reference to the meaning of "foreign control" in Article 25(2)(b) of the ICSID Convention, as opposed to "effective control" in Article 1 (1)(c) of the Swiss BIT. The Respondent’s submissions on "foreign control", for the purpose of establishing jurisdiction under Article 25 of the ICSID Convention, are dealt with in Section VI.C(1) above.
217.
While not expressly connected with the Claimants’ assertion of jurisdiction on the basis of Article 1(1)(c) of the Swiss BIT, the Respondent also submits that, as a result of an alleged failure to prove factual control as between the individual von Pezold Claimants, one of whom is German, the Claimants’ claims under the Swiss BIT must be rejected. The Respondent does not distinguish, in this argument, as between the claims of the Swiss von Pezold Claimants and the claims of the Border Claimants. However, the Respondent’s arguments appear to be relevant to the Tribunal’s consideration of "effective control" for the purpose of determining its jurisdiction over the Border Claimants’ claims. The Respondent’s original submissions are set out in its Rejoinder, as follows (see Rejoinder, paras. 986-987):

To the extent that Claimants have hidden behind their nebulous, complex, obscure, holding structures, and abstained from proving the exact holder and amount of each stakeholder and given the fact that Rüdiger is among the key beneficiaries, trustees and ultimate decision-makers, the entirety of the von Pezold and Border Estate claims should be dismissed as no proof of each Investment has been submitted and one of the Parent Claimants does not have any legal basis for his Claims and consequently there is no certain amount to be considered under the Swiss BIT.

In light of the above, not only must all Claimants’ claims be dismissed under the German BIT but also under the Swiss BIT as Claimants have failed to prove the Identity and holding that might otherwise benefit from consideration of hypothetical protection under the Swiss BIT.

218.
The Respondent further stated the following in its Rebutter (see Rebutter, para. 116; Resp. PHB, para. 219):

As set out in Paragraph 986 of Respondent’s Rejoinder, there is no determinable amount of claims to be considered under the Swiss BIT as Claimant Rüdiger is not Swiss and the intermingled holdings, control, beneficiaries (named and unnamed), trustee and ultimate decision-makers are not determinable, so Claimants’ demands under the Swiss BIT must be rejected.

219.
In its Post-Hearing Brief, the Respondent argued that while the Claimants had focused on the "theoretical grounds of ‘control’", the Respondent had challenged the factual ground of who controlled what, and the Claimants have failed to prove their alleged ownership and control. The Respondent refers, by way of example, to the following statement in the Claimants’ Memorial in support of its view that the Claimants have still not proven ownership (see Resp. PHB, paras. 171 and 222) :

The working capital of their investments may be a mix of their own money, finance from other Investors, commercial banks and government owned development finance Institutions that are mandated to Invest indeveloping markets.

220.
The Respondent appears to allege that: because Rüdiger has a "stake in the Claimants’ holdings"; because that "stake is undefined"; because Rüdiger has a key role in the control of the "Claimants’ assets"; and because German evidence "occupies a central role in the record", no damages can be assessed under the Swiss BIT because there is a lack of precision as to who owns and controls what (see Resp. PHB, para. 222).

(ii) Claimants’ Position

221.
The Border Claimants, although nationals of Zimbabwe, claim Swiss nationality pursuant to Article 1(1)(c) of the Swiss BIT by reason of having been effectively controlled by Swiss nationals and, in particular, by Elisabeth, a Swiss national (see Cl. PHB, para. 15). The Claimants contend that "effective control" of the Border Claimants existed by means of both factual and legal control, as follows (see Cl. PHB, para. 16; see also Cl. PHB, paras. 17-21):

... Factual control arose because Elisabeth is the source of the family’s wealth, and because the family acknowledges that she is inoverall control. Further, Heinrich (Swiss), since 1998, has managed the Border Company Claimants, subject to Elisabeth’s overall control. Legal control arose because the Swiss Family members vote their 48.36% Interest in Border as a block led by Elisabeth. This gives negative control as it permits the blocking of special resolutions, which require 75% of the vote. Further, Rüdiger (German) always voted his 38.13% in Border in the same manner as the Swiss Family Members. This gave the Swiss Family Members positive control with 86.49% of the issued share capital of Border. The legal control has existed since 1992, when Elisabeth and Rüdiger acquired 25.65% of Border. Mr Schofield confirmed that it was further supplemented in 2000 when the von Pezolds were granted joint management of Border by its then majority shareholder, which required their consent for all management decisions. The management agreement fell away in 2003, when the von Pezolds Increased their shareholding to 86%. [citations omitted]

222.
The Claimants submit that the term "effective control", although not defined in the Swiss BIT, means "real control, as opposed to the mere appearance of control; it encompasses direct and indirect control, so long as it is effective" (see Cl. PHB, para. 13).
223.
The Claimants have interpreted the Respondent’s arguments regarding direct and indirect claims as an independent ground of challenge to the jurisdiction of the Tribunal over the von Pezold Claimants’ claims and the Border Claimants’ claims (see below Section VI.D (1)(i)), as opposed to a challenge to the Border Claimants’ standing to claim under Article 1 (1)(c) of the Swiss BIT. It is noted, however, that the Claimants say they have established their beneficial ownership through the provision of title deeds, share certificates and family trust deeds, all of which are supported by organograms (see Cl. PHB, para. 33). The von Pezold Claimants also note that this same evidence states the percentage that each Claimant owns in the Zimbabwean Companies (including the Border Companies). The von Pezold Claimants affirm that, the investments are ultimately controlled by Elisabeth (see Cl. Skel., para. 33; Cl. PHB, para. 33), and that, although Elisabeth stated in her testimony that she did not understand the detail of the organograms she confirmed that she, together with her family, owns the Estates (see Tr. Day 2, p. 463, lines 11-15).

(iii) The Tribunal’s Analysis

224.
As discussed above in connection with the ICSID Convention nationality requirements, it is clear that the von Pezold Claimants are not Zimbabwean citizens and that they satisfy the nationality requirements of the relevant BITs in the case of each individual Claimant. The nationality point, in respect of the von Pezold Claimants, has not been argued strongly by the Respondent and therefore the Tribunal does not linger on it here. The Tribunal is satisfied that the documents filed with the Company House in Zimbabwe referring to Heinrich and Rüdiger as Zimbabwean citizens were filed in error. There is no evidence that either Claimant was ever a citizen of Zimbabwe.
225.
Accordingly, the Tribunal finds that it has jurisdiction ratione personae over the von Pezold Claimants (save for Rüdiger) under the Swiss and German BITs and over Rüdiger under the German BIT.
226.
With regard to the Border Claimants, which were incorporated in Zimbabwe, the Tribunal is satisfied that the Claimants have shown the Border Companies were "effectively controlled" by Swiss nationals and thereby satisfy the requirements of the Swiss BIT. Even if Rüdiger has an interest in the companies, the Tribunal is satisfied that the Companies are effectively controlled by Swiss nationals and, in particular, by Elisabeth. The day-to-day management of the Border Companies by Heinrich is further evidence that they satisfy the requirements of the Swiss BIT. On this basis, the Tribunal dismisses the Respondent’s assertion that only theoretical control has been made out; effective control (both factual and legal) is supported by the evidence. Accordingly, the Tribunal finds that it has jurisdiction ratione personae over the Border Claimants under the Swiss BIT.

D. Jurisdiction Ratione Materiae

(1) The ICSID Convention

(i) Introduction

227.
The Parent Claimants state that their investments include shares owned by them in the Zimbabwean Companies (the "Zimbabwean Company Shares"), the Zimbabwean Properties, the Residual Properties, other income-generating assets (i.e., moveable and immoveable property, including factories, saw mills, machinery and implements owned by the Zimbabwean Companies), the Water Permits attaching to the Forrester and Makandi Estates, 4,500 tonnes of maize owned by Forrester Estate (Private) Limited (the "Seized Maize"), foreign exchange and Zimbabwean dollar bank accounts, returns on investments, the exchange rate promise held in the name of Forrester Estate (Private) Limited by the Central Bank to transfer a certain sum of US Dollars to Forrester in exchange for the 2008 transfer by Forrester Estate of 25% of its Zimbabwean dollar holdings to the Central Bank (the "Forrester Conversion Amount"), the Makandi Acquisition Rghts, the Forrester Water Rights and, with respect to Elisabeth alone, loans extended by her between 1994 and 1998 to the Zimbabwean Companies or otherwise to investments in Zimbabwe (the "Forrester Loans") (see Request for Arbitration, 10 June 2010, para. 119).
228.
The Adult Children Claimants’ investments are stated to include: the shares they own in Forrester Estate (Private) Limited, Border, Border International and Hangani; the Zimbabwean Companies owned through Forrester Estate (Private) Limited, Border and Hangani; the other assets associated with Forrester Estate (Private) Limited, Border, Border International and Hangani; the 4,500 tonnes of maize owned by Forrester Estate (Private) Limited; foreign exchange in Zimbabwean dollar deposits; returns on investments; the exchange rate promise of the Central Bank; and all other assets associated with those investments (see Request for Arbitration, 10 June 2010, para. 120). Because the Adult Children Claimants’ investments do not include the Makandi Estate, all references below to the "Claimants" or "von Pezold Claimants" should be understood to exclude the Adult Children Claimants when the Tribunal addresses claims relating to the Makandi Estate.
229.
Adam von Pezold’s investments are stated to include the following: the shares he owned in Forrester Estate (Private) Limited; the Zimbabwean Properties owned through Forrester Estate (Private) Limited; the other assets associated with Forrester Estate (Private) Limited; the 4,500 tonnes of maize owned by Forrester Estate (Private) Limited; returns on investment; the exchange rate promise of the Central Bank; and all other assets associated with those investments (see Request for Arbitration, 10 June 2010, para. 121). Because Adam’s investments do not include the Makandi or Border Estates, all references below to the "Claimants" or "von Pezold Claimants" should be understood to exclude Adam when the Tribunal addresses claims relating to the Makandi or Border Estates.
230.
The Border Claimants’ investments are stated to include: Border’s shares in the other Border Claimants, the Zimbabwean and Residual Properties belonging to the Border Estate, the three Border sawmills, the two Border factories, the pole treatment plant,other income-generating assets belonging to the Border Estate, foreign exchange and Zimbabwean dollar bank deposits, returns on investments and all other assets associated with those investments (see Request for Arbitration, 3 December 2010, para. 103).

(ii) Respondent’s Position

a) The Salini Test

231.

The Respondent submits that ICSID tribunals, such as those in Fedax N.V. v. Republic of Venezuela ("Fedax") (see ICSID Case No. ARB/96/3, Decision of the Tribunal on Objections to Jurisdiction, 11 July 1997, CLEX-397), Salini Costruttori S.p.A. and italstrade S.p.A. v. Hashemite Kingdom of Jordan ("Salini")(see ICSID Case No. ARB/02/13, Decision of the Tribunal on Jurisdiction, November 29, 2004, CLEX-438), Joy Mining Machinery Limited v. Arab Republic of Egypt ("Joy Mining") (see ICSID Case No. ARB/03/11, Award on Jurisdiction, 6 August 2004, CLEX-212), Phoenix Action, Ltd. v. Czech Republic ("Phoenix Action")(see ICSID Case No. ARB/06/5, Award, 15 April 2009, CLEX-240) and Standard Chartered Bank v. United Republic of Tanzania ("Standard Chartered") (see ICSID Case No. ARB/10/12, Award, 2 November 2012, RLEX-19), all agree on certain characteristics of investment and have, through their awards, clarified the definition of investment in the ICSID Convention (see Resp. Skel., para. 58).

232.
The Respondent asserts that the Claimants’ investments did not involve a risk, were of a commercial nature or a mere "holding", and offered no contribution or significance to the economic development of Zimbabwe (see Resp. Skel., paras. 58-68; Rejoinder, para. 949). In its Post-Hearing Brief, the Respondent identified additional criteria for an investment as developed in these cases and alleged that the Claimants have not satisfied any of them: duration, risk, not of a commercial nature or a mere holding, contribution or significance to the economic development of the host State, regularity of profit and return, investment made in good faith, and investment made in accordance with the law (see Resp. PHB, para. 155). Despite articulating these additional criteria, such as duration, regularity of profit and return and investment made in good faith, the Respondent has not made specific allegations in respect of these criteria as applied to the Claimants’ investments.
233.
The Respondent submits that the Claimants’ investments are purely commercial in nature, involving commercial farming activities in which the host State is not involved. The Respondent encourages the Tribunal to take a course of conduct approach, such as the one adopted by the LETCO tribunal (seeLiberian Eastern Timber Corporation v. Republic of Liberia, ("LETCO") 2 ICSID Reports 343, Award, 31 March 1986, CLEX-167), to determine whether the Claimants’ acquisitions were merely commercial (see Resp. PHB, para. 160, referring to LETCO quoting USC §1603(d))43.
234.
The Respondent also states that the Claimants took on no economic risk at the time of their investment, relying on the following passage from the Claimants’ Memorial in support of this position (see Rejoinder, para. 954, quoting the Claimants’ Memorial at paras. 72-73 and 173):

A central tenet of their business philosophy is to ensure that preservation of their investments for the next generation - as stated, they have lost investments to regime before and they did not wish it to happen again. Before investing they undertake due diligence. Their due diligence includes understanding the economy and local politics, and meeting with government officials in order to understand the host State’s attitude to investors.

Therefore when the von Pezold Claimants have made investments - including in the Republic - they have always carried out significant due diligence in order to ensure that their wealth is protected;

However, they wished to ensure the preservation of their wealth.

235.
The Respondent characterises the Claimants’ invocation of the FPS provisions of the BITs as evidence of the Claimants’ belief that no "legal or factual risk existed" because they were protected by "Rhodesian-style absolute full security and protection", (see Rejoinder, para. 956).
236.
The Respondent relies on the evidence of Minister Mutasa in support of its position that the Claimants made no contribution to the development of Zimbabwe and, forth is reason, do not qualify for protection under the ICSID Convention or the BITs (see Rejoinder, para. 946, quoting Minister Mutasa’s Witness Statement, paras. 32, 33, 34 and 42, R-12):

32. Claimants never contributed anything to Zimbabwe. They drained our land of its resources to increase their family wealth which was already considerable

33. Claimants were here to reap profits for themselves only. They did not create anything useful for Zimbabwe. Their only concern was to maximise their individual family’s financial gain. As they never contributed anything positive to our country, in that sense they did not make an investment which merits benefiting from the protections of a BIT in this arbitration...

We told them ‘you are no longer wanted here.’

... They have exploited us, contributing nothing to our country, and drained us of our country’s wealth...

We do not like the greedy ones in any race or culture, those who are selfish, those who contribute nothing to our country but who only thing of taking. We like good people, be they white or otherwise, all good people are accepted and all bad people are not.

237.
The Respondent also points to the Claimants’ own description of their choices during the alleged State of Emergency when food was short to feed the Zimbabwean population, whose staple food is maize (see Rejoinder, para. 961, quoting Mem. at para. 266):

Given that the Forrester Estate has less arable land available, it has given priority to the cultivation of tobacco over maize because it provides a better financial return.

238.
The Respondent submits that its Intention when entering Into the BITs was to give Incentives to "new" Investments, not to perpetuate the "Rhodesian Way of Life" (see Resp. PHB, para. 156). By "new", the Respondent appears to mean a new Influx of assets, which It contrasts to the holding of assets (see ibid. , n. 633). The Respondent also appears to advance an argument that "new" legal compliance was required at the time when the BITs entered Into force in the event legal requirements for investments made prior to the entry Into force of either BIT had not been satisfied (see ibid.) .
239.
The Respondent further argues that the Claimants have, in fact, drained off the riches of the Zimbabwean economy and, based on the dates of the Claimants’ acquisition following the start of the Third Chimurenga44, "bought the land of departing Europeans betting on their pan-European passports to benefit from a future BIT to cash in some day on their confidential investments." (see ibid. , para. 158).

b) Local Assets, Local Investment

240.
The Respondent submits that the ICSID Convention is not applicable when an investment is not made by "foreigners into a host Country". In the present cases, the Respondent submits that all of the investments were conducted through local Zimbabwean Companies (some of which were originally Rhodesian companies) (see Rejoinder, para. 936) and that the properties in question were first acquired by a Zimbabwean Company, in some cases even before the Claimants indirectly purchased shares of the company owning the land, and since then new acquisitions were made by local companies using their assets such that no foreign investments are at stake (see ibid. , para. 942).
241.
The Respondent relies on the Tradex case in support of this objection, and in particular the distinction made by the tribunal as between Tradex and the Albanian joint venture of which it was a part for the purpose of identifying a protected investment (see ibid. , para. 965, quoting Tradex, para. 103):

As Tradex is the (only) Claimant in this Case, only an Investment by Tradex itself is relevant. It is undisputed between the Parties that the Joint Venture "Tradex Torovlce" formed by the Agreement of 10 January 1992 (T1) is a separate legal entity under Albanian law (see Art. 1 paragraph 2 of the Agreement and Section 2 of the Authorization of 21 January 1992 = T2). Therefore, while a Tradex contribution is an Investment covered by the 1993 Law, any investment by the Joint Venture itself is not a "foreign investment".

242.
The Respondent also relies on the Amco Asia case in support of its position that the Claimants’ investments are not foreign; it invokes the Amco Asia tribunal’s discussion of indirect control where several companies had been interposed between the foreign investor claimant and the local entity45.

c) Origin of Capital

243.
The Respondent submits that, because funding for the alleged investments came from Zimbabwe and remained in Zimbabwe, no foreign investments are at stake (see ibid. , paras. 939, 941, 942 and 985). The Respondent adds that the Claimants’ investments were "self sufficient", in particular after 2005, referring to the following statement in the Claimants’ Memorial (see ibid. , para. 941, quoting Mem. at para. 83):

However, prior to their Zimbabwean businesses being affected by the Land Reform and Resettlement Programme, there was by and large enough cash generated by the businesses for them to be self-financing.

244.
In its Rebutter, the Respondent asserted that the Claimants had failed to prove and Indeed were "Incapable of proving that any funds from outside Zimbabwe, from Germany or from Switzerland, ever trickled down to contribute to the Zimbabwean economy". The Respondent continued as follows:

... As a complex railroad switching station of the world’s largest cities, many incoming tracks can be switched onto myriad outgoing tracks of financial flow. It is possible that any input Claimants were to prove having made at the top of this infernal machine never reached Zimbabwe.

245.
The Respondent concludes that it cannot be considered to have consented to this.

d) Claims by Shareholders

246.
The Respondent submits that the von Pezold Claimants and the Border Claimants are Invoking "Indirect claims" (i.e., "claims in which a shareholder requests compensation for damages resulting from a measure that was directed exclusively against the rights of the company in which It holds shares") (see Resp. Skel., para. 69; Rejoinder, paras. 963-977) because the Impugned measures were directed against the Zimbabwean Companies, not their shareholders, and, as such, the Claimants do not have standing under Article 25(1) of the ICSID Convention (see Rejoinder, paras. 207, 963-965, 967-971 and 977).
247.
The Respondent’s theory of "Indirect claims" appears to be drawn from a discussion published by Professor Gabriel Bottini on treaty claims advanced by shareholders. The issue was defined by Professor Bottini as follows (see G. Bottini, "Indirect Claims under the ICSID Convention", (2008) 29 U. Pa. J. Int'l L" p. 565, R-55, RLEX-18):

Whenever the host state adopts measures that directly affect shareholders' rights, such as the right to receive any declared dividend or to participate in shareholders meetings, it is undisputed that under international law either the shareholder, if it has direct access to an international procedure, or its national state through diplomatic protection, will have standing to claim against the measures. The problem arises, however, when the contested measure affects only the rights of the company because, in any event, it will generally also affect the economic interests of its shareholders measures.

For the purposes of this Article, an indirect claim (or an indirect action) is defined as a claim in which a shareholder requests compensation for damages resulting from a measure that was directed exclusively against the rights of the company in which it holds shares. As will become readily apparent, however, one of the most difficult tasks in this domain is determining whose rights are the ones really affected, notwithstanding the allegation of the shareholder-claimant (who will always argue that it is invoking its own rights and not those of the company). [emphasis added]

248.
The Respondent also argues, under the lens of its indirect claims objection, that owning shares through intermediary companies does not necessarily constitute an investment in Zimbabwe because an intermediary company "might not use the assets of its parent company to realize its own investment but rather possibly funds generated by itself’ (see Rejoinder, para. 966).

e) Indirect Claims

249.
The Respondent relies on the jurisprudence of the International Court of Justice ("ICJ"), and in particular Barcelona Traction, Light and Power Co., Ltd. (Belgium/Spain) ("Barcelona Traction") (see 5 February 1970, ICJ Reports 1970, CLEX-153) in support of its position on indirect claims. The Respondent refers to the following statement by the ICJ that, under international law, a company has a distinct personality from its shareholders and because of this separation a company cannot be held responsible for the actions of its shareholders and vice versa(see Rejoinder, para. 969, quoting Barcelona Traction, para. 47, CLEX-153):

[A] wrong done to a company frequently causes prejudice to its shareholders. But the mere fact that damage is sustained by both company and shareholder does not imply that both are entitled to claim compensation.... Thus whenever a shareholder’s interests are harmed by an act done to the company, it is to the latter that he must look to institute appropriate action; for although two separate entities may have suffered from the same wrong, it is only one entity whose rights have been infringed.

250.
The Respondent also refers to the case of Ahmadou Sadio Diallo (Republic of Guinea v. Democratic Republic of the Congo) ("Diallo")(see ICJ, Judgment on the Merits, 30 November 2010, CLEX-365) in which Guinea brought a claim on behalf of one of its nationals who had invested in Congo through two locally incorporated entities. The Respondent states that the ICJ also declined jurisdiction in that case on the basis that a distinction must be made between the companies and the shareholders for purposes of a claim (see Rejoinder, para. 970).
251.
The Respondent invoked Article 25(2)(b) of the ICSID Convention for the proposition that shareholders are entitled to bring a claim before the Centre only in exceptional cases, such as when there is consent that a locally incorporated entity is treated as a national of another State for the purposes of Convention. The Respondent submitted that this is not the case here, as neither the German nor the Swiss BIT expressly allows shareholders to file claims on behalf of companies (see ibid. , para. 971).

f) Indirect Shareholdings

252.
The Respondent takes the position that the Claimants are only "remotely connected" to the Zimbabwean Companies (see Rebutter, para. 215; Resp. PHB, para. 163).
253.

The Respondent notes that, in Enron, the tribunal stated that "there is a need to establish a cut-off point beyond which claims would not be permissible as they would have only a remote connection to the affected company" (see Rejoinder, para. 973 and Rebutter, para. 210, quoting Enron Corporation and Ponderosa Assets, L.P. v. Argentine Republic ("Enron") (see ICSID Case No. ARB/01/3, Decision on Jurisdiction (Ancillary Claim), 14 January 2004, para. 52, CLEX-207). The Respondent takes the position that this is precisely the point here, that Zimbabwe’s declarations of Interest in"new" Investments to develop the economy did not extend its consent to "an Ill-defined, non-specific, nebulous maze of holdings ultimately owned or controlled by nobody knows whom or what ‘dormant’ off-shore company. Even If a ‘smile’ were proven, or suspected, it is neither an Invitation - having occurred after the acquisition of the holding - or consent and these claims should be considered Inadmissible as being only remotely connected with the affected company and the scope of the legal system protecting those holdings" (see Rejoinder, para. 974; Rebutter, para. 212). Thus, the Respondent frames the real issue here as the fact, in its view, that the Claimants only have the most remote connection to the affected companies (see Rebutter, para. 215; Resp. PHB, para. 163).

254.
The Respondent refers to the conclusion reached by the tribunal in Standard Chartered, that "an Indirect chain of ownership linking a British company to debt by a Tanzanian creditor does not in itself confer the status of Investor under the UK-Tanzanla BIT" (see Rebutter, para. 216, quoting Standard Chartered, para. 200, RLEX-19). The Respondent concludes that the Claimants have not proved their Investment.

(iii) Claimants’ Position

a) The Salini Test

255.

In their Memorial, the Claimants took the position that, as there is no definition of "Investment" in the ICSID Convention, the Tribunal is "primarily required to focus on what has been agreed by the Contracting Parties to the BITs" (see Mem., para. 1061). The Claimants acknowledged the "considerable body of case law which considers that in order for an Investment to be an Investment for the purpose of Article 25 of the ICSID Convention, it must also fulfill the criteria in the Salini Test (see Mem., para. 1063), but cautioned that the "Salini criteria" are "mere yardsticks" to assist indetermining whether there has been an Investment for the purpose of Article 25 of the ICSID Convention and are not jurisdictional criteria (see Cl. Skel., para. 20; Cl. PHB, para. 24). The Claimants have referred to several ICSID cases insupport of this proposition (see Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania ("Biwater"), ICSID Case No. ARB/05/22, Award, 24 July 2008, paras. 312, 316-318, CLEX-233; Pantechniki S.A. Contractors & Engineers v. Republic of Albania, ICSID Case No. ARB/07/21, Award, 30 July 2009, para. 43, CLEX-245; Ambiente Ufficio S.P.A. and others v. Argentine Republic ("Ambiente Ufficio"), ICSID Case No. ARB/08/9, Decision on Jurisdiction & Admissibility, 8 February 2013, paras. 479 and 480, CLEX-415). In Ambiente Ufficio, where the tribunal stated (see Ambiente Ufficio, para. 479, CLEX-415):

... The preceding analysis has also made clear that the present tribunal endorses the view that the term "investment" in Art. 25(1) of the ICSID Convention should not be subjected to an unduly restrictive interpretation. Hence, the Salini criteria, if useful at all, must not be conceived of as expressing jurisdictional requirements strictu sensu.

256.
The Claimants state that their contribution consisted of know-how, capital funding and management (see Cl. Skel., para. 21; Cl. PHB, para. 25), as borne out by the Claimants’ testimony, summarized as follows (see Cl. PHB, para. 25):

... Elisabeth stated that forestry was the family’s main business in Europe before they acquired the Border Estate. Rüdiger confirmed that his and Elisabeth’s respective families had been Involved in forestry and farming for many generations before Investing in Zimbabwe. This know-how came with the Claimants to Zimbabwe and it is self-evident that it was applied to the three Estates. Elisabeth and Rüdiger confirmed that the money to purchase the Forrester Estate came from Elisabeth, and Heinrich’s written evidence is that Elisabeth provided the Loans. The Claimants’ witnesses were not questioned inregard to the capital contributions to Border or Makandi, but Heinrich’s and Rüdiger’s written evidence is that capital contributions were made inregard to Border and Makandi. In addition, Rüdiger and Heinrich confirmed their prior evidence that they were deeply Involved in the management of the three Estates.... [citations omitted]

257.
They also submit that Zimbabwe has recognized their contribution to the economic development of Zimbabwe, referring to the following statements made by senior government officials (see Cl. Skel., para. 22, quoting C-477, C-496 and C-221; see also Surrejoinder, paras. 155, 156, 157; Cl. PHB, para. 26):

[T]he seizure of commercial land was contributing to the country’s high Inflation rate... If you invade a coffee, tea, cocoa, wheat or a fruit farm what you are doing is to undermine the productive capacity of this economy, therefore causing Inflation. [Governor of the Central Bank, Mr. Gideon Gono, October 2005]

It was remarkable to witness a good example of effective land utilization on your property. We would like to encourage you to continue this splendid task which is the basis of economic development of our country. [Senior Civil Servant of the Ministry of Lands, Mr. T.T.H. Muguti, November 1991]

The protection and preservation of Indigenous forests, found in most parts of the country and especially in Matabeleland North and the Midlands Provinces, and the properly administered exploitation of the exotic timber plantations of Manicaland [location of Border], are matters of great national importance... It employs some 16,000 people. The industry accounts for 3% of the GDP. [Zimbabwe land audit finding in relation to forestry]

258.
In any event, the Claimants say that their contribution is self-evident from the number of people that the Claimants employ, the foreign exchange they earn from export sales, and inregard to Border the nature of the products they produce (e.g. sawn timber for construction). They also note that maize is grown for domestic consumption and that the only time they were unable to grow maize for the commercial market was during a period when the sale price was set at below the cost of production (see Cl. Skel., para. 22; Cl. PHB, para. 26; see also Heinrich I, paras. 216-225).
259.
The Claimants submit that Minister Mutasa has a predilection to view all foreign Investment in unfavourable terms and harbours a deep prejudice against white people, as evidenced by his testimony, and that these factors rather than any actual knowledge rooted in fact form the basis for his views as to the Claimants’ contribution to the economic development of Zimbabwe (see Cl. PHB, para. 27).
260.
As regards the commerclallty of the Claimants’ Investment, the Claimants submit that most Investments have a commercial element to them and that under the full Salini test, regularity of profit and return is not only consistent with the concept of Investment but is required (see Surrejoinder, para. 161). The Claimants distinguish the case of Joy Mining from the present case, noting that Joy Mining Involved a standard commercial (supply) contract (a one-off transaction) as opposed to the Claimants multi-year investments, which have Included the building of lasting Infrastructure such as dams, Irrigation network, roads, curing sheds for tobacco, 95 tractors, combine harvesters, trucks and the Charter Estate sawmill (see Cl. Skel., para. 23; Surrejoinder, paras. 162-164; Cl. PHB, para. 28).
261.
Finally, the Claimants submit that their success was not guaranteed, noting that variation inprice and weather are risks that were faced by their investments inagriculture and timber production. The Claimants also reject the premise asserted by the Respondent that the Claimants faced no risk because they undertook due diligence before they Invested in-Zimbabwe and that they benefited from "Rhodesian-style" absolute full security (see Surrejoinder, paras. 168-169; Cl. PHB, para. 29). The Claimants refer to the 2005 Constitutional Amendment as evidence of risk and the success or failure of the Forrester Estate as evidence of risk of non-repayment of the loans extended by Elisabeth (see Cl. Skel., para. 24).

b) Local Assets, Local Investment

262.
The von Pezold Claimants affirm that they plead their claims on the basis that their investments Include the shares that they directly and Indirectly own in the Zimbabwean Companies, as well as the underlying assets and operations of those companies (see Surrejoinder, para. 71). Border also affirms that it claims on the basis that its Investments Include the shares in the other Border Claimants, as well as the underlying assets of those companies. Hangani pleads its claim on the basis that its investments include the Border Properties that it directly owns. Border International pleads its claim on the basis that its investments Include the stock that it directly owns (see Surrejoinder, para. 72).
263.
In their Surrejoinder, the Claimants recalled the following background to their respective claims (see Surrejoinder, paras. 74-75):

74. Interms of the background facts to this issue, it will be recalled that the von Pezold Claimants (and ultimately Elisabeth), control the Zimbabwean Companies and the underlying assets through a combination of legal control and factual control. The legal control is through their indirect shareholdings in the Zimbabwean Companies. The factual control exists because through Heinrich they manage the businesses of the Zimbabwean Companies, and Heinrich, Elisabeth, and Rüdiger hold seats on the boards of the Zimbabwean Companies.

75. The von Pezold Claimants acquired their shareholdings in the Zimbabwean Companies for the purpose of acquiring the Zimbabwean Properties that make up the Forrester, Border and Makandi Estates and the business activities with which those companies are associated, in doing so, the von Pezold Claimants made investments into Zimbabwe, [footnotes omitted]

264.
The Claimants note that the term "investment" is neither defined nor limited under Article 25(1) of the ICSID Convention. They further state that there is no restriction in Article 25(1) that would prevent the underlying assets of a company being classed as an investment of the shareholders. Turning to the BITs, the Claimants state that the definition of investment in each BIT is drafted in the widest possible terms, comprising assets of every kind, including moveable and immoveable property, shares, claims to money and any performance having an economic value (or, in the case of the German BIT, any performance under a contract having economic value) (see Surrejoinder, paras. 79-80).
265.
The Claimants note that there is a distinction between domestic corporate law (and concepts of veil piercing) and international law applicable to investment disputes, referring to Total SA. v. Argentine Republic (Total)(see ICSID Case No. ARB/04/01, Decision on Objections to Jurisdiction, 25 August 2006, CLEX-406), where an ICSID tribunal found, for the purpose of its jurisdiction, that it was immaterial that the assets and rights which were alleged to have been injured belonged to Argentine companies. Thus, the Claimants submit that the position under public international law is that if, as a matter of fact, a shareholder controls the company that owns the assets in issue, public international law will consider those underlying assets to be the investments of the shareholder46. According to the Claimants, there is nothing in the Swiss or German BIT to contradict this position (see Surrejoinder, paras. 83-85).
266.
The Claimants submit that the case of Tradex relied upon by the Respondent, does not in fact support the Respondent’s position that the assets owned by the Zimbabwean Companies are not the von Pezolds’ assets as the tribunal never addressed the situation where the claimant Investor controls the company and the underlying assets, and uses that company as a vehicle through which to make or acquire assets (see Surrejoinder, para. 106; Cl. Skel., n. 16).

c) Origin of Capital

267.
The Claimants state that they did use capital that originated from outside Zimbabwe when they purchased the share capital in the Zimbabwean Companies, and that subsequent Investments into the Estates have been a combination of reinvesting profits and provision of some debt, including the loans extended by Elisabeth from her own funds, held outside of Zimbabwe (see Surrejoinder, paras. 131-132).
268.
In any event, the Claimants submit that nothing in Article 25(1) Imposes an origin of capital requirement and that other ICSID tribunals have so held (seeTokios Tokéles v. Ukraine ("Tokios Tokéles"), ICSID Case No. ARB/02/18, Decision on Jurisdiction, 29 April 2004, para. 73, CLEX-401, para. 73; Fedax, paras. 29 and 41, CLEX-397).
269.
As regards the BITs, the Claimants submit that such a requirement would be Inconsistent with the object and purpose of the BITs, which they say is to encourage foreign Investment in-Zimbabwe, and that there is similarly no requirement in the BITs that, in order for investments to benefit from protection, the Investments must have been acquired through the use of capital that originates from outside Zimbabwe. The Claimants refer again to the case of Tokios Tokéles, where the tribunal rejected Ukraine’s arguments in connection with the origin of capital vis-à-vis Article 25(2) of the ICSID Convention and the Lithuania-Ukraine BIT, which contains a similarly broad definition of Investments as the Swiss and German BITs. The Claimants Insist that it is "the Investment itself that must be in the territory of Zimbabwe, not the capital used to acquire It" (see Surrejoinder, para. 140).
270.
The Claimants submit that Tradex does not support the Respondent’s argument but rather contradicts It, as the Tradex tribunal held that so long as the capital was used for the benefit of the investment in Albania it did not need to flow into Albania (see Surrejoinder, para. 143, citing Tradex, paras. 118-119, RLEX-11). The Claimants also note that the Tradex tribunal was not required to decide the issue of capital that does not enter the host State but which is used to acquire shares in a company in the host State, but that this issue was considered by the tribunal in Fedax, which confirmed that such a transaction would not prevent the shares of the local company from being an investment covered by the BIT (see Surrejoinder, para. 147, citing Fedax, para. 41, CLEX-179).

d) Claims by Shareholders

271.
The Claimants contend that the Respondent in fact raises two separate grounds for objection under its indirect claims objection: (i) indirect claims, being claims asserted by the Claimants on behalf of the Zimbabwean Companies; and (ii) claims asserted by the Claimants on the basis of indirect shareholdings in companies. The Tribunal agrees with the Claimants’ observation in this regard and the Tribunal has therefore split the Respondent’s objection(s) according to the Claimants’ proposed approach.
272.
Finally, although the Respondent appears to raise this objection (or these objections) in respect of both the von Pezold Claimants and the Border Claimants, the Claimants note that the point regarding indirect shareholdings does not appear to relate to the Border Claimants, as only one of those companies (Border) holds shares in other companies (the other two Border Claimants) and those shares are held directly (see Surrejoinder, para. 223; C-56).

(i) Indirect Claims

273.
The Claimants contend that the measures in question were directed at both the von Pezold Claimants and the Zimbabwean Companies and had the effect of directly expropriating: (i) the von Pezold Claimants’ investments owned through the Zimbabwean Companies; and (ii) the Zimbabwean Companies’ properties. Thus, the Claimants submit that they are asserting direct rights. The Claimants also contend that the measures had the effect of indirectly expropriating the von Pezold Claimants’ shares in the Zimbabwean Companies, causing them loss (see Cl. Skel., para. 26; Surrejoinder, para. 175). The Claimants state that the foregoing applies mutatis mutandis to the Border Claimants (see Rebutter, para. 176; Cl. Skel., para. 26).
274.
The Claimants reason that as the Claimants’ investments included the underlying assets of the Zimbabwean Companies, the measures must have been directed at the Claimants and they therefore have standing. The Claimants also reason that even if the measures were only directed against the Zimbabwean Companies, the effect of those measures on the Claimants is such that they still have standing to pursue their claims (see Cl. Skel., para. 27; Surrejoinder, para. 179). The Claimants take the position, on the basis of Total(seeTotal, para. 80, CLEX-406), that the same measures may cause losses to both a company and to its shareholders.
275.
The Claimants note that, while the Respondent advances its objection regarding Indirect claims under Article 25(1) of the ICSID Convention, its arguments are primarily based on the jurisprudence of the ICJ. To the extent the Respondent advances its argument under Article 25(2)(b) of the Convention as well, the Claimants aver that the Respondent has misunderstood this provision and assert that it does not address the issue of shareholders bringing claims and does not restrict shareholders from bringing claims inregard to measures directed against their companies or them (see Surrejoinder, paras. 181-186).
276.
The Claimants submit that the ICJ jurisprudence on which the Respondent relies is Inapposite because it concerns the law of diplomatic protection of shareholders, not the protection of shareholders under Investment protection treaties. The Claimants aver that Investment treaty tribunals have consistently held that the law of diplomatic protection is Inapplicable to claims pursuant to Investment treaties, and that shareholders may bring claims for the losses they have suffered that arise from measures directed at their companies (see Cl. Skel., para. 28; Surrejoinder, paras. 187-213).
277.

The Claimants refer (see Surrejoinder, para. 214) in particular to the following discussion of Barcelona Traction in CMS Gas Transmission Company v. Argentine Republic ("CMS") (see ICSID Case No. ARB/01/8, Decision on Objections to Jurisdiction, 17 July 2003, paras. 43, 44, 45 and 48, CLEX-203)47:

However, Counsel for the Claimant are also right when affirming that this case was concerned only with the exercise of diplomatic protection in that particular triangular setting, and involved what the Court considered to be a relationship attached to municipal law, but it did not rule out the possibility of extending protection to shareholders in a corporation in different contexts. Specifically, the International Court of Justice was well aware of the new trends in respect of the protection of foreign investors under the 1965 Convention and the bilateral investment treaties related thereto.

Barcelona Traction is therefore not directly relevant to the present dispute, although it marks the beginning of a fundamental change of the applicable concepts under international law and State practice. Inpoint of fact, the Elettronica Sicula decision evidences that the International Court of Justice itself accepted, some years later, the protection of shareholders of a corporation by the State of their nationality in spite of the fact that the affected corporation had a corporate personality under the defendant State's legislation.

Diplomatic protection itself has been dwindling in current international law, as the State of nationality is no longer considered to be protecting its own interest in the claim but that of the individual affected. To some extent, diplomatic protection is intervening as a residual mechanism to be resorted to in the absence of other arrangements recognizing the direct right of action by individuals. It is precisely this kind of arrangement that has come to prevail under international law, particularly in respect of foreign Investments, the paramount example being that of the 1965 Convention.

The Tribunal therefore finds no bar in current International law to the concept of allowing claims by shareholders independently from those of the corporation concerned, not even if those shareholders are minority or non-controlling shareholders. Although it is true, as argued by the Republic of Argentina, that this is mostly the result of lex specialis and specific treaty arrangements that have so allowed, the fact is that lex specialis in this respect is so prevalent that it can now be considered the general rule, certainly in respect of foreign investments and increasingly inrespect of other matters. To the extent that customary International law or generally the traditional law of international claims might have followed a different approach - a proposition that is open to debate - then that approach can be considered the exception.

278.
As a final point, the Claimants submit that the Tribunal should bear inmind that the Zimbabwean Companies have no remedy under Zimbabwean law to recover compensation for the land that has been expropriated or to object to the expropriation itself. The Claimants state that this flows from the fact that the 2005 Constitutional Amendment removed the right of the former owners of land that had been expropriated to object to the expropriation in court. Thus, if successful, the Respondent’s arguments would have the effect of denying the shareholders any remedy whatsoever (see Surrejoinder, paras. 220-221).

(ii) Indirect Shareholdings

279.
The Claimants note that this objection can only apply to the von Pezold Claimants and consider this to be an objection to the von Pezold Claimants bringing claims in relation to their shares in the Zimbabwean Companies in circumstances where there are companies Interposed between them and the Zimbabwean Companies.
280.
The Claimants submit that the term "Investment" is neither defined nor limited in Article 25 of the ICSID Convention, but rather is defined in Article 1 of the BITs in the "widest possible terms". The Claimants argue that there is nothing in the BITs to prevent the indirect shareholdings in the Zimbabwean Companies from being classed as Investments (see Surrejoinder, paras. 228-230).
281.

The Claimants contend that ICSID jurisprudence supports the Claimants’ conclusion, referring in particular to the cases of Siemens, loannis Kardassopoulos v. Georgia (Kardassopoulos) (see ICSID Case No. ARB05/18, Decision on Jurisdiction, 6 July 2007, CLEX-227), and Mobil (see Surrejoinder, paras. 231-239). The Claimants quote the following language from the Siemens Decision on Jurisdiction (see Siemens, para. 137, CLEX-402):

The Tribunal has conducted a detailed analysis of the references in the Treaty to ‘investment’ and ‘investor’. The Tribunal observes that there is no explicit reference to direct or indirect investment as such in the Treaty. The definition of ‘investment’ is very broad. An investment is any kind of asset considered to be such under the law of the Contracting Party where the Investment has been made. The specific categories of investment included in the definition are included as examples rather than with the purpose of excluding those not listed. The drafters were careful to use the words ‘not exclusively’ before listing the categories of ‘particularly’ included investments. One of the categories consists of ‘shares, rights of participation in companies and other types of participation incompanies’. The plain meaning of this provision is that shares held by a German shareholder are protected under the Treaty. The Treaty does not require that there be no interposed companies between the Investment and the ultimate owner of the company. Therefore, a literal reading of the Treaty does not support the allegation that the definition of investment excludes Indirect investments.

282.
The Claimants aver that Enron is not good authority for the Respondent’s assertion that indirect shareholdings are not investments under Article 25 of the ICSID Convention, noting that the Enron tribunal permitted the claim of minority indirect shareholders. The Claimants set out their analysis of the Enron tribunal’s conclusions as follows (see Surrejoinder, paras. 244-246):

244. The Enron tribunal disagreed and held that indirect shareholdings were not precluded from coverage under the bilateral investment treaty. Indoing so, the Enron tribunal considered that the issue is whether or not the investor (shareholder) is too remote from the company which is the subject of the measures that have also caused losses to the shareholder. The Enron tribunal considered this to be a function of the extent of the host State’s consent to arbitration, which in turn it considered to be a function of whether or not the State had consented to the investment. In this regard the Enron tribunal said:

"If consent has been given in respect of an investor and an Investment, it can be reasonably concluded that the claims brought by such investor are admissible under the treaty. If the consent cannot be considered as extending to another Investor or Investment, these other claims should then be considered inadmissible as being only remotely connected with the affected company and the scope of the legal system protecting that investment."

245. However, if Enron considered that consent to arbitration was the relevant test then it should have considered the dispute resolution provisions of the United States- Argentina bilateral investment treaty - it did not do this.

246. In any event, it is apparent that the Enron tribunal also considered that another matter was also of equal importance. That other matter was whether or not it could be said that as a matter of public international law, Enron and Pondersosa were the owners of the shares in TGS. Incoming to this conclusion it is evident that the Enron tribunal did not consider ownership to be a question of domestic law (under Argentinian law, EPCA, CIESA and EDIDESCA were the owners of TGS, not Enron and Pondersosa - see the diagram in para 241 above). The relevant passage from the decision is as follows:

"The conclusion that follows is that in the present case the participation of the Claimants was specifically sought and that they are thus Included within the consent to arbitration given by the Argentine Republic. The Claimants cannot be considered to be only remotely connected to the legal arrangements governing the privatization, they are beyond any doubt the owners of the investment made and their rights are protected under the Treaty as clearly established treaty-rights and not merely contractual rights related to some intermediary. The fact that the investment was made through CIESA and related companies does not in anyway alter this conclusion."... [citations omitted]

283.
Returning to the case at hand, the Claimants submit that the von Pezold Claimants’ Investments in the Zimbabwean Companies are not "portfolio Investments", but rather investments which the von Pezold Claimants themselves manage and control, Identifying the following Indicia of management and control (see Surrejoinder, para. 247):

• legal control of the Zimbabwean Companies through their Indirect shareholdings;

• factual control of the Zimbabwean Companies exercised through Heinrich von Pezold;

• Heinrich, Elisabeth and Rüdiger hold seats on the boards of the Zimbabwean Companies;

• All companies between the von Pezold Claimants and the Zimbabwean Companies are controlled by the same means;

• Respondent has acknowledged the von Pezold Claimants’ ownership of the shares in the Zimbabwean Companies in its court orders, in its Land Audit Committee Reports and in the papers of its Executive sitting in Cabinet.

(iv) The Tribunal’s Analysis

284.

There is considerable jurisprudence to support the proposition that, although the primary task of an ICSID tribunal is to establish whether an investment exists inaccordance with the specific words of the relevant treaty, there may nonetheless be certain inherent characteristics of an Investment which assist a tribunal in this task. This is so whether under the ICSID Convention or otherwise.

285.

Whatever the position may be on Salini as regards the elements to be satisfied, the Tribunal finds that it is rather less clear that the Salini test is the authoritative statement on those characteristics. Indeed, there seems to be a move away from Salini to a simpler test Involving contribution, duration and risk. All of these characteristics are satisfied in the present case. Both the von Pezold Claimants and the Border Claimants have made a clear contribution both financially and interms of expertise and time Invested inmanaging the assets. The Respondent has not intimated that duration is an issue, but in any event this criterion is clearly satisfied. The Respondent’s argument that, as a result of careful due diligence, there was no risk involved in the investments cannot be sustained and finds no support either on the evidence available in this specific case or the general jurisprudence on this topic. It is evident that the present case does not involve a "commercial transaction" (such as a sale of goods) of the type that this "Inherent characteristics" test is meant to distinguish. The Respondent’s Salini argument is therefore dismissed.

286.
The jurisprudence is uncertain as to whether a contribution to economic development of the State is required as part of the Investment criteria. However, given the employment provided, contribution to the economy and know-how involved in the Investment, it is clear that any such criterion would also be satisfied in the present case.

(2) The BITs

(i) Respondent’s Position

289.
The Respondent also challenges the Tribunal’s jurisdiction ratione materiae over the disputes under the BITs on several grounds.
290.
The Respondent asserts that the BITs require an Investment to be "made" as opposed to just passively held (i.e., in a portfolio of holdings) (see Resp. Skel., paras. 46ff; Resp. PHB, para. 39), referring in particular to the language of Articles 2 and 9 of the German BIT, which refer to "Investments made" in the context of the promotion and protection of "Investments" and provide that the German BIT applies to all Investments "made inaccordance with the laws of’ the host State, and Article 2 of the Swiss BIT, which provides that the Swiss BIT applies to all Investments "made inaccordance with the laws of’ the host State (see Rebutter, paras. 87-88, 106-107).
291.
The Respondent relies upon the ICSID case of Standard Chartered insupport of its position that, in order to benefit from protection, Investments must be actively made. The Standard Chartered tribunal held that the UK-Tanzanla BIT required an Investment to be made by, not simply held by, an Investor, which meant that the investor had to have contributed actively to the Investment (see Standard Charterd Bank v. United Republic of Tanzania, ICSID Case No. ARB/10/2, Award, 2 November 2012, para. 257, RLEX-19 ("Standard Chartered")). The Standard Chartered tribunal ultimately dismissed the case for lack of jurisdiction, having found that the putative investor had not made the Investment inquestion:

230. Having considered the ordinary meaning of the BIT’S provision for ICSID arbitration when a dispute arises between a Contracting State to the BIT and a national of the other Contracting State concerning an Investment "of" the latter set out in Article 8(1) of the UK-Tanzania BIT, the context of that provision and the object and purpose of the BIT, the Tribunal interprets the BIT to require an active relationship between the investor and the Investment. To benefit from Article 8(1)’s arbitration provision, a claimant must demonstrate that the investment was made at the claimant’s direction, that the claimant funded the investment or that the claimant controlled the investment in an active and direct manner. Passive ownership of shares in a company not controlled by the claimant where that company in turn owns the investment is not sufficient.

231. The Tribunal is not persuaded that an "investment of" a company or an Individual implies only the abstract possession of shares in a company that holds title to some piece of property.

232. Rather, for an investment to be "of" an investor in the present context, some activity of investing is needed, which Implicates the claimant’s control over the investment or an action of transferring something of value (money, know-how, contacts, or expertise) from one treaty-country to the other.

292.
The Respondent argues that, like the UK-Tanzania BIT, the German and Swiss BITs also require a "new" or "active" Investment that makes a contribution to the host State’s economy in order to benefit from their protection. The Respondent emphasizes that the German and Swiss BITs are bilateral, not one-way, and refers to the following reasoning of the Standard Chartered tribunal (see Rebutter, para. 63):

268. Could one imagine an executive in SCB Hong Kong deciding to purchase the IPTL loan with the expectation that it would get the protection of the BIT between the UK and Tanzania? Perhaps under that scenario, the UK-Tanzania BIT could be said to encourage the investment.

269. However, such encouragement works only inone direction. The UK-Tanzania BIT imposes no liability on Hong Kong or China to protect Investors from Tanzania, by providing mutual benefits to Tanzanians investing in Hong Kong. Moreover, the decision insuch a case would have been made by someone in Hong Kong, not in Britain, the Contracting State under the relevant BIT.

270. In the absence of text in the BIT expressing a contrary intent and on a record indicating no Involvement or control of the UK national overthe investment, it would be unreasonable to read the BIT to permit a UK national with subsidiaries all around the world to claim entitlement to the UK-Tanzania BIT protection for each and every one of the investments around the world held by these daughter or granddaughter entities. The BIT preamble says "reciprocal protection" and "reciprocal" must have some meaning.

293.
The Respondent concluded in its Post-Hearing Brief, on the basis of Mr. Nyaguse’s testimony, that the Claimants came to hold their investments in Zimbabwe in the Standard Chartered sense, constituting mere assets "held" and not protected investments "made" (see Resp. PHB, para. 149).
294.
The Respondent also alleges that the von Pezold Claimants have not proven their beneficial ownership of the Investments or the portion they each own of the Zimbabwean Companies48(see Resp. Skel., para. 143).
295.
The particular legal basis for this objection is not entirely clear. The Claimants appear to consider this to be an Independent ground for objection to jurisdiction although, as Indicated above, it has some relevance to the Respondent’s position regarding the Border Claimants’ standing to claim under the Swiss BIT and the von Pezold Claimants’ claims over the assets of the Zlmbawean Companies. As an Independent ground for objection to jurisdiction, the objection is encapsulated in the following paragraphs from the Rejoinder (see Rejoinder, paras. 986-987):

To the extent that Claimants have hidden behind their nebulous, complex, obscure, holding structures, and abstained from proving the exact holder and amount of each stakeholder and given the fact that Rüdiger is among the key beneficiaries, trustees and ultimate decision-makers, the entirety of the von Pezold and Border Estate claims should be dismissed as no proof of each investment has been submitted and one of the Parent Claimants does not have any legal basis for his Claims and consequently there is no certain amount to be considered under the Swiss BIT.

In light of the above, not only must all Claimants’ claims be dismissed under the German BIT but also under the Swiss BIT as Claimants have failed to prove the identity and holding that might otherwise benefit from consideration of hypothetical protection under the Swiss BIT.

296.
The Respondent further stated the following in its Rebutter (see Rebutter, para. 116; Resp. PHB, para. 219):

As set out in Paragraph 986 of Respondent’s Rejoinder, there is no determinable amount of claims to be considered under the Swiss BIT as Claimant Rüdiger is not Swiss and the intermingled holdings, control, beneficiaries (named and unnamed), trustee and ultimate decision-makers are not determinable, so Claimants’ demands under the Swiss BIT must be rejected.

297.
In its Post-Hearing Brief, the Respondent argued that while the Claimants have focused on the "theoretical grounds of‘control’", the Respondent has challenged the factual ground of who controls what, and the Claimants have failed to prove their alleged ownership and control. The Respondent referred, by way of example, to the following statement in the Claimants’ Memorial insupport of its view that the Claimants have still not proven ownership (see Resp. PHB, para. 171 and 222):

The working capital of their investments may be a mix of their own money, finance from other Investors, commercial banks and government owned development finance institutions that are mandated to Invest indeveloping markets.

298.
The Respondent argues that the Forrester Water Rights are not investments because they are neither "rights in rem", pursuant to Article 1(a) of the German BIT, nor "business concessions under public law", pursuant to Article 1(e) of the German BIT (see Rejoinder, para. 232). The Respondent notes that Article 1(a) of the German BIT defines investment as "movable and immovable property as well as any other rights in rem such as mortgages, liens and pledges". The Respondent submits that the reference to in rem rights in this provision should be interpreted as follows (see Rejoinder, para. 232):

To understand the meaning given by the States to the phrase "inrem", one should use the example that follows such phrase in the definition" mortgages, liens and pledges which are all derivative legal concepts of items affecting or related to a property that are used as a guarantee based on such property with the aim to alter such property until complete fulfillment of the obligation that gave raise [sic] to such right. By comparison, a right to use water on a property is nothing similar to that concept and cannot be qualified as a right in rem per Article 1(a) of the BIT.

299.
The Respondent also states that while, pursuant to Article 1(e) of the German BIT, a business concession may be comprised of rights to natural resources, this does not mean that all rights to natural resources constitute a business concession. Here, the Respondent argues that the Claimants cannot prove the existence of a business concession with respect to the use of water on the properties.

(ii) Claimants’ Position

300.
The Claimants submit that there is no requirement under the BITs for an Investment to have been "made" and that a passive holding is sufficient to satisfy the definition of an Investment under each BIT (see Cl. Skel., para. 10; Cl. PHB, para. 36).
301.
The Claimants distinguish the facts in Standard Chartered by reasoning that the tribunal’s findings turned on its Interpretation of ambiguous wording in the dispute resolution clause in the UK-Tanzania BIT49, the use of the word "made" in the BIT, including in its definition of "investment", and the fact that the claimant had expressly disavowed that it controlled the subsidiary that held the investment (see Cl. Skel., para. 39; Cl. PHB, paras. 37-38).
302.
The Claimants note that, here, the von Pezold Claimants control the Zimbabwean Companies. The Claimants also note that there is no similar ambiguity in the language of the dispute resolution clause of the Swiss BIT as there was in the UK-Tanzania BIT, and the definition of "Investment" in the Swiss BIT does not refer to investments being "made". Although the language of the German BIT dispute resolution clause is similar to that of the dispute resolution clause in the UK-Tanzania BIT which posed a problem for the claimants in the Standard Chartered case, the Claimants emphasize that the definition of "Investment" in the German BIT does not refer to investments being "made". The Claimants argue that the use of the term "owned", incontradistinction to "controlled", in Article 3(1) of the German BIT, further Implies that passive Investment is covered50.
303.
The Claimants argue that, even If the analysis of the Standard Chartered tribunal is found to apply here, the Claimants have "made" Investments and have satisfied the criteria for the making of an Investment as set out by the tribunal in Standard Chartered(see Cl. Skel., p. 10; Cl. PHB, para. 40) in that they:

• Decided to make the Investments (see Heinrich I, paras. 35 and 37; Heinrich and Rüdiger von Pezold’s Joint Witness Statement, para. 4);

• Funded the Investments (see Cl. Skel., n. 107; Heinrich’s I, paras. 263-278, 419, and 452-457);

• Controlled the Investments (see Elisabeth I, paras. 1 and 16; Rüdiger I, paras. 1,2 and 11; Heinrich I, paras. 1,3, 56, 58 and 488; Heinrich V, para. 65);

• Managed the Investments (see Elisabeth I, paras. 1 and 16; Rüdiger I, paras. 1,2 and 11; Heinrich I, paras. 1,3, 56, 58 and 488; Heinrich V, para. 65); and

• Transferred something of value to acquire them.

304.

The Claimants submit that nothing more than bare legal ownership is required by either BIT. They refer to the Interim Award on Jurisdiction and Admissibility in Hulley Enterprises Limited (Cyprus) v. Russian Federation ("Hulley Enterprises") (see UNCITRAL Arbitration Rules (Energy Charter Treaty), Interim Award on Jurisdiction and Admissibility, 30 November 2009, CLEX-362), in which the tribunal reviewed the plain text of the Energy Charter Treaty and found that it does not require more than simple legal ownership of shares for an Investment to qualify as a protected Investment. Following the approach to Interpretation set out in Article 31 of the Vienna Convention on the Law of Treaties ("Vienna Convention"), the tribunal confirmed that there was "no indication whatsoever that the drafters of the Treaty Intended to limit ownership to ‘beneficial’ ownership" (seeHulley Enterprises, para. 429). The Claimants apply the same principle to the present case.

305.
In any event, the Claimants submit that they have established their beneficial ownership through the provision of title deeds, share certificates and family trust deeds, all of which are supported by organograms (see Heinrich I, Appendix 1, C-18; C-63, C-52 and C-64 (organograms); Cl. PHB, para. 33). The Claimants note that this same evidence also states the percentage that each Claimant owned in the Zimbabwean Companies. The Claimants admit that the Investments are ultimately controlled by Elisabeth (see Cl. Skel., para. 33; Cl. PHB, para. 33), and that although Elisabeth stated in her testimony that she did not understand the details of the organograms, she confirmed that she, together with her family, own the Estates (see Tr. Day 2, p. 463, lines 11-15). The Claimants also note that Mr. Machaya admitted in his testimony that the Claimants owned the Investments at the time the pleaded causes of action accrued (see Tr. Day 5, p. 1461, Line 1 to p. 1462, line 1).
306.
The Claimants argue that there is nothing to Infer that the Contracting Parties to the German BIT Intended to give the term "rights in rem" in Article 1(a) a special meaning limited to rights in rem that are akin to "mortgages, liens and pledges". The Claimants note that the ordinary meaning of rights in rem are rights that are exercisable against the whole world in relation to property. The von Pezold Claimants note that the Forrester Water Rights attached to the land to which they related and gave the holder the exclusive use of public water covered by the right. The Claimants reason that the Forrester Water Rights were in rem rights, and as such covered by Article 1(a) of the German BIT, as they could be asserted against the whole world in relation to the water that they covered (see Cl. Skel., para. 35).
307.
The von Pezold Claimants also argue that the Forrester Water Rights are business concessions under public law within the meaning of Article 1 (e) because water is a natural resource and a Water Right gave the holder the right to extract and exploit water for business purposes (see Cl. Skel., para. 36). The Claimants note that a public law element of the concession is that it was granted pursuant to legislation, namely the Water Act 1976 (see Surrejoinder, para. 266).
308.
Finally, the von Pezold Claimants submit that the Forrester Water Rights are "every kind of asset" within the meaning of Article 1 of the German BIT, as they constitute compensable property under Zimbabwean law. The Claimants refer to s. 16(1)(c) of the Constitution, which required that the owner of "property" be compensated if his property was expropriated, and to the Water Act 1976, which required that the holder of a Water Right be compensated if the right was expropriated (see Cl. Skel., para. 37).

(iii) The Tribunal’s Analysis

309.

Article 11 of the German BIT provides that only disputes "concerning an investment of [a] national or company [of a Contracting Party] in the territory of the [other] Contracting Party" are protected. Similarly, Article 10 of the Swiss BIT provides that only disputes "with respect to investments between a Contracting Party and an investor of the other Contract Party" are protected. The issue here Is whether the Claimants’ investments satisfy the definition of "investment" in each respective BIT.

310.
The Swiss and German BITs each define "investment" as follows:

Swiss BIT German BIT
Article 1 Article 1
Definitions Interpretation
For the purpose of this Agreement: For the purpose of this Agreement:
(2) The term "Investments" shall include every kind of assets and particularly: (a) movable and immovable property as well as any other rights in rem, such as servitudes, mortgages, liens, pledges; (b) shares, parts or any other kinds of participation in companies; (c) claims to money or to any performance having an economic value; (d) copyrights, industrial property rights (such as patents, utility models, industrial designs or models, trade or service marks, trade names, indications of origin), know-how and goodwill; 1 the term "investments" comprises every kind of asset, in particular: a) movable and immovable property as well as any other rights in rem such as mortgages, liens and pledges; b) shares in companies and other kinds of Interests in companies; c) claims to money or to any performance under contract having an economic value; d) Intellectual property rights such as copyrights, patents, utility models, industrial designs, trade marks, trade names, trade and business s