von Pezold and others v. Zimbabwe, Procedural Order No. 10, 24 févr. 2014

1.

On the final day of the Hearing on jurisdiction, liability and quantum held in Washington, D.C., from 28 October to 2 November 2013 (the "Hearing"), the Tribunals directed, inter alia, that the parties submit any proposed corrections to the Hearing transcript by 22 November 2013 and any replies to the other party's proposed corrections by 16 December 2013. The Respondent also reiterated its undertaking, given on the fifth day of the Hearing, to provide responses to certain questions posed by the members of the Tribunals and to produce certain documentary materials relating to land audit reports and the travaux préparatoires of the bilateral investment treaty between Germany and Zimbabwe ("Germany-Zimbabwe BIT") (collectively, the "post-hearing materials").

2.

In her letter of 2 December 2013 to the parties, the Tribunals' Secretary wrote on behalf of the Tribunals directing a further procedure by which the parties were invited to agree corrections of an editorial nature and to provide (i) a final list of editorial transcript corrections agreed by the parties and (ii) a final list of editorial transcript corrections remaining in dispute between the parties, if any, by 16 December 2013. The Claimants were invited to file any observations they may have on the Respondent's post-hearing materials by 23 December 2013, and the Respondent was invited to file a reply to the Claimants' observations by 6 January 2014.

3.

This Procedural Order No. 10 disposes of the above matters, among others.

4.

On 22 November 2013, the Claimants submitted their proposed corrections and redactions to the Hearing transcript. The Respondent sought and was granted a one-week extension of time to submit its proposed corrections.

5.

On 29 November 2013, the Respondent submitted its proposed corrections to the Hearing transcript along with its post-hearing materials. The post-hearing materials comprised the following documents:

(a) A letter from counsel for the Respondent, dated 29 November 2013;

(b) A letter from Mr. Graciano Nyaguse, dated 29 November 2013;

(c) A report prepared by Mr. Nyaguse on the negotiations that occurred between 26th and 30th November 1990, between Germany and Zimbabwe in regard to the Germany-Zimbabwe BIT ("Zimbabwe’s 1990 Report") (RLEX-31(a));

(d) a letter from Mr. Klaus-Peter Brandes of the German Embassy in Harare to Mrs. Alice Nyazika of Zimbabwe’s Ministry of Foreign Affairs, dated 2 December 1993 (RLEX-31(b));

(e) a letter from Mr. Nyaguse to Mr. Klaus-Peter Brandes of the German Embassy in Harare, dated 3 January 1980 (but purportedly written in early 1994) (RLEX-31(c));

(f) a letter from Mr. Nyaguse to the German Embassy in Harare, dated 1 September 1994 (RLEX-31(d));

(g) a letter from Mr. Klaus-Peter Brandes of the German Embassy in Harare to Mr. Nyaguse, dated 9 September 1994 (RLEX-31(e));

(h) a letter from Mr. Nyaguse to Mr. Klaus-Peter Brandes of the German Embassy in Harare, dated 24 March 1995 (RLEX-31(f)); and

(i) a Verbal Note from the German Embassy in Harare to the Zimbabwe Ministry of Foreign Affairs, dated 30 March 1995 (RLEX-31(g)).

6.

On 2 December 2013, the Secretary of the Tribunals wrote to the parties on behalf of the Tribunals directing a further procedure relating to the parties’ proposed transcript corrections of an editorial nature and relating to the post-hearing materials filed by the Respondent. The Secretary communicated that the Tribunals considered they had been sufficiently briefed on the matter of potential inadmissible evidence and/or submissions such that no further submissions were necessary relating to substantive redactions to the transcript.

7.

On 16 December 2013, counsel for both parties wrote to the Tribunals to advise that they had not yet completed the joint transcript correction review exercise and therefore proposed to communicate their final agreed and disputed lists to the Tribunals by 20 December 2013.

8.

On 20 December 2013, the Claimants submitted, on behalf of the parties, two lists, being a list of the editorial transcript corrections that have been jointly agreed by the parties ("List 1") and a list of the editorial transcript corrections that remain in dispute ("List 2").

9.

Also on 20 December 2013, the Respondent wrote to the Tribunals confirming its agreement to the corrections in List 1 and submitting its "comments on Claimants’ proposed corrections to the transcripts". The Tribunals understand this document to contain all of the proposed substantive redactions proposed by the Claimants and the Respondent’s observations thereto. The Respondent also enclosed a copy of Exchange Control Directive RE-277, requested by and provided to counsel for the Claimants during the Hearing (see Tr. Day 5, pp. 1439-1440).

10.

On 23 December 2013, the Claimants submitted their observations on the post-hearing materials (the "Claimants’ December 23 Observations").

11.

No reply was submitted by the Respondent to the Claimants’ December 23 Observations on 6 January 2014.

12.

On 5 February 2014, the Claimants clarified in connection with certain proposed substantive redactions to the Hearing transcript on grounds of inadmissibility that no redactions are sought in connection with Mr. Paul Paul’s evidence, but underscored their concern in respect of the use that might be made of such evidence by the Respondent in support of arguments declared to be inadmissible.

13.

On 13 February 2014, the Respondent wrote to the Tribunals seeking an extension of time for the filing of its Post-Hearing Submission, due on 7 March 2014, to a date at least 60 days following receipt of (a) the final version of the Respondent’s Skeleton Argument integrating the Tribunals’ decisions regarding the Claimants’ request for redaction; and (b) the final corrected version of the Hearing transcript ("Respondent’s 13 February Letter").

14.

On 17 February 2014, further to the Tribunals’ invitation, the Claimants wrote in response to the Respondent’s 13 February Letter agreeing to the requested extension for the filing of the Post-Hearing Submissions in connection with the final correction version of the Hearing transcript but objecting to the Respondent’s request in connection with the Respondent’s Skeleton Argument, recalling the Tribunals’ decision with respect to the provisional admission of the parties’ Skeleton Arguments recorded in the Hearing transcript as follows (see "Claimants’ 17 February Letter", para. 3):

"[T]he Tribunal, informed by the clear terms of Procedural Order Number 9, will determine, during its deliberations, what needs to be redacted, what should be redacted, and what should remain as being admissible. This is a situation where the Parties are invited to trust the Tribunal, to trust the arbitrators to act in accordance with their conscience.... So, both Skeletons are admitted into the record provisionally, subject to what I have explained." (Day 1, pp. 22-23)

15.

On 18 February 2014, the Respondent wrote to the Tribunals in reply to the Claimants’ 17 February Letter ("Respondent’s 18 February Letter") maintaining its request in connection with its Skeleton Argument, explaining its position as follows (see ibid., p. 2):

"The Arbitral Tribunals’ resolution of matters raised by Claimants in connection with the transcript will require an effort on the part of the Arbitral Tribunals conceptually contiguous to that of deciding on redactions to final form of Respondent’s Skeleton Argument as submitted on 21 October 2013. It would also seem logical to allow the Parties to make Post-Hearing Submissions knowing exactly what interpretation of Procedural order No.9 the Arbitral Tribunals deem acceptance. Respondent believes that it would also be to the benefit of the case and the Arbitral Tribunals to have Post-Hearing Submissions only contain material not subject to any pending questions of admissibility. On the contrary, the Arbitral Tribunals would have to review Skeleton Arguments and Post-Hearing Submissions twice, once for admission of their contents and then on their merits."

16.

The Respondent further pointed to the following statement made by the President of the Tribunals, on behalf of the Tribunals, on the first day of the Hearing in connection with the Tribunals’ decision relating to the provisional admission of the Skeleton Arguments (see ibid.):

"[to redact from the Skeleton those sentences, those passages, which, because of Procedural order Number 9, should be declared as inadmissible] was going to be an impossible task to be performed thoroughly and in a fulsome way prior to 2:15 this afternoon [Monday 28 October 2014]."

17.

The Respondent takes the position that the above passage and course of action until now "tends to contradict Claimants’ assertion in paragraph 4 of Claimants’ aforementioned letter that "the terms of PO No. 9 and the Orders that came before it, are clear as to what should not be included in the Respondent’s Skeleton Argument." (see ibid.)

18.

On 19 February 2014, the Claimants wrote again to the Tribunals, averring that, in their view, there is no genuine misunderstanding on the Respondent’s part with respect to the meaning of Procedural Order No. 9, dated 15 October 2013 ("Claimants’ 19 February Letter"). The Claimants take the following position (see Claimants’ 19 February Letter, para. 3):

"... The Respondent’s true intent is to achieve a reconsideration of PO No. 9 by other means in the hope that it may have admitted into argument (via the Skeleton Argument) matters which it has not pleaded and which were therefore ruled by PO No. 9 to be inadmissible. This is an unfair and inefficient manner in which to conduct arbitration. Indeed there is no provision under the ICSID arbitration rules for parties to seek interpretation of the procedural orders of the Tribunals.

In the circumstances, the Claimants request that the extension for the time in which the Parties have to file their submission is 60 days from the date on which the Parties receive the final version of the Hearing Transcripts."

19.

On 21 February 2014, the Secretary to the Tribunals wrote to the parties on behalf of the Tribunals to advise that no further submissions were required from the parties on the foregoing matters.

20.

The Tribunals have reviewed the parties’ proposed agreed corrections to the Hearing transcript in List 1, attached as Annex A to this Procedural Order. The Tribunals hereby approve List 1. The Hearing transcript shall be amended so as to reflect the corrections contained in List 1.

21.

The Tribunals have also reviewed the parties’ disputed editorial corrections to the Hearing transcript in List 2 and have decided each proposed correction in dispute. The Tribunals’ decisions are contained in the column titled "Tribunals’ Decision" in List 2, attached as Annex B to this Procedural Order.

22.

The Tribunals have considered the Claimants’ proposed substantive redactions to the Hearing transcript and the Respondent’s observations thereon and have recorded their decisions in the column titled "Tribunals’ Decision" in the document titled "Claimants’ Proposed Redactions to Hearing Transcript and Respondent’s Comments", attached as Annex C to this Procedural Order.

23.

During the Hearing, the matter of land audits was put to Minister Mutasa by counsel for the Claimants on cross-examination. Counsel for the Claimants directed Minister Mutuasa’s attention to the Redfern Schedule prepared by the Claimants in connection with the Claimants’ First Request to Produce Documents dated 11 March 2011, in which copies of land audit reports prepared by the Government of Zimbabwe had been requested during the document production phase of these proceedings and which were ordered to be produced by the Tribunals in Procedural Order No. 1, dated 31 October 2011. Certain of the requested land audit reports were produced, while others were not. On cross-examination, Minister Mutasa agreed that, in principle, all of the requested reports should be produced, whereupon counsel for the Claimants invited Minister Mutasa and the current Minister of Lands, Minister Mombeshora, in attendance at the Hearing but not called as a witness by either party, to agree that the outstanding land audit reports will be released to the Claimants (see Tr. Day 5, pp. 1397, 1417).

24.

Minister Mombeshora subsequently committed, on behalf of the Respondent, to endeavour to obtain copies of the requested reports that had not previously been produced, noting however that such reports were not Ministry of Land documents (see Tr. Day 5, pp. 1441-1442).

25.

In their letter of 29 November 2013, the Respondent communicated the following results of Minister Mombeshora’s search:

"There was no audit carried out in 2010 (TB-016, p. 6(1)(i)). There was an agreement between the two main political parties that there should be a Land Audit Commission. The Commission was never established and the funds were not available to conduct the audit.

The other reports requested by the Claimants are not available and most are unknown to the Ministry of Lands e.g. (1)(a) to (1)(h) with the exception of the Utete Report (1)(c) which appears in the form submitted to the Claimants and the 2008 Report produced by the Ministry of Lands (1)(f)."

26.

In their December 23 Observations, the Claimants noted their acceptance of the position that land audits from 2010 onward were blocked and therefore no reports are likely to exist. As regards the pre-2010 land audits, the Claimants maintain that the Respondent’s response is unsatisfactory. The Claimants take the following position:

"15.... The Respondent to these ICSID proceedings is the State of Zimbabwe, not the Ministry of Lands. Therefore it is irrelevant that some of the land audits may be ‘unknown’ to the Ministry of Lands. In any event, the Respondent’s prior responses suggest that it is aware of all of the pre-2010 land audits and considers that they exist (see paras 5 to 7 and 11 to 12 above). Further, the Respondent in its 29 November 2013 submissions does not state why the pre-2010 land audits are not available. However, it is noteworthy that the Respondent does not assert any legal impediment or privilege in regard to the land audits. Therefore there is no legitimate reason as to why they should not be provided by the Respondent (see the Claimants’ letter of 11 May 2011, regarding legal privilege)."

27.

The Claimants therefore request that, pursuant to Article 9(5) of the IBA Rules on the Taking Evidence in International Arbitration (2010), the Tribunals infer that the land audits would be adverse to the interests of the Respondent and, in particular, that the land audits would confirm the information contained in the Political Beneficiary Table (TB7/95), the CFU Beneficiary Table (C-518) and paragraphs 51 to 53 of Professor Chan’s First Witness Statement (TB4/50).

28.

The Tribunals have taken note of the parties’ respective positions in connection with the existence and, as the case may be, content of the land reform audit reports identified by the Claimants in their March 2011 Redfern Schedule and again at paragraph 4 of their December 23 Observations. In due course, the Tribunals shall consider all of the relevant evidence surrounding the land audits and any reports that are alleged to have been prepared but not produced in this proceeding, and will draw inferences as the Tribunals consider appropriate and necessary to render their final Award in each arbitration. The Tribunals recall in this regard that the parties have agreed that the Tribunals may be guided by the IBA 2010 Rules on the Taking of Evidence in Imitational Arbitration to the extent that they are not inconsistent with the Summary Minutes of the First Organizational Conference or the ICSID Arbitration Rules (see Summary Minutes, para. 15.19).

29.

Following the cross-examination by counsel for the Claimants of Mr. Graciano Nyaguse, members of the Tribunals questioned Mr. Nyaguse on the interpretation of certain provisions of the Germany-Zimbabwe BIT and its Protocol. It arose in the course of this examination that Mr. Nyaguse had consulted the travaux préparatoires of the BIT in Harare in the recent period prior to attending to give evidence at the Hearing (see Tr. Day 5, pp. 1559-1662).

30.

Counsel for both parties confirmed that incomplete copies of travaux préparatoires in connection with the Germany-Zimbabwe BIT were produced by the Respondent and exist on the record of the proceedings (see Tr. Day 5, pp. 1562-1563). At the Tribunals’ invitation, Respondent agreed to advise the Tribunals and the Claimants should it be determined that additional documents forming part of the travaux préparatoires are located (see Tr. Day 5, pp. 1591).

31.

On 29 November 2013, the Respondent produced seven contemporary documents, described in a letter from Mr. Nyaguse to counsel for the Respondent, dated 29 November 2013, as "the documents and correspondence pertaining to the discussions surrounding the BIT with Germany". In his covering letter, counsel for the Respondent in turn noted that, in Mr. Nyaguse’s view, the additional seven documents provided "constitute a reasonably complete chain of discussions leading up to the signature of the German BIT". The documents produced are identified in paragraph 5 above.

32.

In their December 23 Observations, the Claimants note that the Respondent does not purport to have provided the entire content of the travaux préparatoires and that three of the documents provided are unsigned, in circumstances where the original final documents, if they existed, would have been signed (see Claimants’ December 23 Observations, p. 10). In the Claimants’ view, the documents provided do not constitute a "reasonably complete" set of travaux préparatoires and cannot therefore serve as an effective supplementary means of interpretation because they invite speculation as to the course of negotiations, their common intent and the evolution of the final text of the treaty, as well as changes in a State’s intention or position during the course of the negotiation (see ibid., p. 11-12).

33.

The Tribunals note the Claimants’ substantive response, at pages 12 to 22 of their December 23 Observations, to the opinions expressed by Mr. Nyaguse in his November 29 letter to counsel for the Respondent as to the conclusions that should be drawn from the travaux préparatoires. The Tribunals note also the Claimants’ position as to the use that appears to be made or is likely to be made of these documents in support of certain arguments of the Respondent that have been declared to be inadmissible.

34.

As with the land audit reports, the Tribunals shall take all of the parties’ submissions regarding the interpretation of the Germany-Zimbabwe BIT into account, with due regard to the questions raised surrounding the authenticity of certain of the documents and the limited number of documents provided. The proposed use of such materials by either party will also be considered within the boundaries of the decisions already articulated by the Tribunals in its prior procedural orders relating to the admissibility of certain of the Respondent’s arguments.

35.

In view of the parties’ agreement to extend the time for filing their respective Post-Hearing Submissions until 60 days following receipt of the corrected Hearing transcript, the Tribunals hereby confirm the requested extension and direct that the parties file their Post-Hearing Submissions no later than 60 days following receipt of the final corrected Hearing transcript.

36.

The Tribunals have considered the Respondent’s additional request concerning revisions to the Respondent’s Skeleton Argument and the Claimants’ objections thereto. The Tribunals’ decision communicated to the parties on the first day of the Hearing, i.e. 28 October 2013, was clear. Both parties’ Skeleton Arguments were admitted onto the record of these proceedings provisionally. The parties were invited to trust the members of the Tribunals that, in the course of the Tribunals' deliberations, any passages in the Respondent’s Skeleton Argument that must be struck and disregarded based on the terms of Procedural Order No. 9 would be struck and disregarded. The Tribunals clearly communicated to the parties with this decision that redacted Skeleton Arguments would not be further circulated to the parties. Moreover, the fact that the redactions of the Respondent’s Skeleton Argument could not be confirmed in advance of the start of the Hearing was due to the short time between the receipt of the Claimants’ proposed redactions to the Skeleton Argument on Tuesday, 22 October 2013, and the start of the Hearing on Monday, 28 October 2013, as is clear from the Day 1 transcript, and not due to any latent ambiguity in Procedural Order No. 9.

37.

The redaction of the Respondent’s Skeleton Argument for content ruled inadmissible by the clear terms of Procedural Order No. 9 is not "conceptually contiguous" to the transcript correction exercise. The transcript correction process was put in place following discussions with the parties during the 16 October 2013 pre-Hearing telephone conference to ensure that any live witness testimony and argument recorded in the transcript is consistent with the Tribunals’ decisions set out in its various Procedural Orders, and in particular in Procedural Order No. 9. The transcript review process was intended to avoid disruptions of time reserved for the parties’ oral arguments through lengthy procedural discussions given the limited time agreed by the parties for the oral procedure (see Pre-Hearing Telephone Conference of 16 October 2013, audio recording, at 1:43:35 - 1:50:50).

38.

The Tribunals understand the Respondent to suggest at page 2 of its 19 February Letter that by circulating a redacted version of the Respondent’s Skeleton Argument in advance of the Post-Hearing Submissions, the parties will then - and only then - know exactly what interpretation of Procedural Order No. 9 the Tribunals deem acceptable. The Tribunals disagree. Procedural Order No. 9, which runs 27 pages in length and decides matters that were extensively briefed in written and oral submissions, is both detailed and clear. Counsel for the Respondent confirmed during the pre-Hearing telephone conference held on 16 October 2013 that Procedural Order No. 9 was "very clear" (see pre-Hearing telephone conference of 16 October 2013, audio recording, at 1:48:33).

39.

Accordingly, the parties are directed to abide by the terms of Procedural Order No. 9 in preparing their Post-Hearing Submissions. No further or additional interpretation of Procedural Order No. 9 shall be given to the parties through redactions to the Respondent’s Skeleton Argument.

40.

The Tribunals note the Respondent’s statement that it would be to the benefit of the case and to the Tribunals to have Post-Hearing Submissions which "only contain material not subject to any pending question of admissibility" (see Respondent’s 19 February Letter, p. 2). The Tribunals agree. This ought to be possible by following the Tribunal’s directions above and abiding by the clear terms of Procedural Order No. 9. Nevertheless, the Tribunals understand this last proposition by the Respondent to be a precautionary measure that would ensure clarity, as much for the parties as for the Tribunals, as to any material pleaded by either party in their Post-Hearing Submission that is, despite a good faith effort to abide by the terms of Procedural Order No. 9, nonetheless inadmissible.

41.

Accordingly, each party may file within 30 days of receipt of the other party’s Post-Hearing Submission a brief statement identifying any material that it considers to be inadmissible based on the Tribunals’ decisions set out in Procedural Order No. 9 or another Procedural Order issued by the Tribunals in these proceedings. As indicated by the Tribunals at the outset of the Hearing and confirmed in paragraph 36 above, the Tribunals will consider these matters in the course of their deliberations and the Tribunals' decisions will be set out in the Final Award to be rendered in each proceeding.

42.

Based on the foregoing, the Arbitral Tribunals have decided as follows:

(a) The parties' List 1 editorial corrections to the Hearing transcript as set out in Annex A to this Procedural Order are approved and adopted;

(b) The Tribunals' decisions in respect of the disputed List 2 editorial corrections to the Hearing transcript are recorded in Annex B to this Procedural Order;

(c) The Tribunals' decisions in respect of the Claimants' proposed substantive redactions to the Hearing transcript are recorded in Annex C to this Procedural Order;

(d) The transcript of the Hearing shall be corrected according to the Tribunals' decisions recorded at paragraphs 42(a)-(c) of this Procedural Order and its Annexes and the corrected transcript shall be the official transcript of the Hearing in these proceedings;

(e) The additional information and documents provided by the Respondent in connection with Zimbabwe's land audits and the travaux préparatoires for the Germany-Zimbabwe BIT shall be placed on the record and be treated consistent with the Tribunals' decisions set out at paragraphs 28 and 34 above;

(f) The parties shall file their Post-Hearing Briefs within 60 days from receipt of the corrected Hearing transcript;

(g) The parties may file a brief statement with the Tribunals within 30 days from receipt of the other party's Post-Hearing Submission identifying any inadmissible material contained in that Submission; and

(h) The Respondent's request for an extension of time for the filing of its Post-Hearing Submission based on the circulation of a redacted version of the Respondent's Skeleton Argument is denied.

43.

There shall be no order as to costs.

David A.R. Williams	Désigné par l'investisseur
L. Yves Fortier	Président
Michael Hwang	Désigné par l'Etat

von Pezold and others v. Zimbabwe

Documents de l'affaire

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

Procedural Order No. 10

I. INTRODUCTION

II. PROCEDURAL HISTORY

III. DISCUSSION

A. Transcript Corrections and Redactions

B. Land Audits

C. Travaux Préparatoires

D. Extension of Time for Post-Hearing Submissions

E. Procedural Order No. 9 and the Respondent’s Skeleton Argument

F. Reply Post-Hearing Submissions to Identify Inadmissible Material

IV. THE ARBITRAL TRIBUNALS’ DECISIONS

Cette fonctionnalité requiert un abonnement