Investment Arbitration Reporter

By Luke Eric Peterson

(Editor's Note: This article is one of a small number on our website that is made available to non-subscribers free of charge)

The fate of an international tribunal hangs in the balance as heads of state from Southern Africa prepare to meet this month.

The Southern African Development Community (SADC) tribunal rocketed to public consciousness in 2008 when a panel of its judges ruled that violent land seizures in Zimbabwe violated international law protections owed to foreigners and locals alike.

Since that time, the claimants in the Zimbabwe case have struggled to enforce the tribunal’s judgment, and the SADC tribunal has come under the political microscope.

Subsequent rulings from the tribunal in 2009 and 2010 affirmed that Zimbabwe was not in compliance with its treaty obligations, and imposed costs orders on Zimbabwe.

In a series of statements, Zimbabwean government officials have insisted that the tribunal was not “validly established” because a protocol to the SADC treaty giving rise to the tribunal was never ratified by SADC member-states.

In August of last year, SADC Heads of State declined to censure Zimbabwe for its spurning of the tribunal judgment. Instead, the SADC governments commissioned a formal review of the tribunal and its operations. Upon this news, concerns were voiced by litigants before the tribunal, as well as non-governmental organizations, that the review process might provide a pretext for clipping the tribunal’s wings.

However, a draft report prepared by Cambridge University Lecturer Lorand Bartels, and that has been seen by IAReporter, has roundly rejected arguments by Zimbabwe that the tribunal lacks jurisdiction over SADC member-states. What’s more, Dr. Bartels put forward a series of recommendations to strengthen and shore up the Namibia-based tribunal. (See separate item for a summary of his draft report, including its implications for foreign investment protection)

In April of this year, Dr. Bartels’ report was debated by a committee of ministers from the SADC states, and a series of recommendations were forwarded onward for the consideration of SADC heads of state. While the recommendations of the ministers are not public, IAReporter understands that the ministers did not reject the broad thrust of the consultant’s report.

An extraordinary Summit of SADC leaders is to be convened on May 19-20 to discuss the future of the SADC tribunal.

It remains to be seen whether SDC leaders will accept the broad thrust of Dr. Bartels’ report – which affirmed that Zimbabwe and all SADC governments must bow to the jurisdiction of the SADC tribunal – or whether steps will be taken to reduce the scope for the body to adjudicate claims by individuals against SADC governments.

Critics of review process say that tribunal has been hobbled in recent months

While the debate over the tribunal plays out, some claimants with cases before that body have complained that the review process has hobbled the tribunal’s work.

A group of dispossessed Zimbabwean land-owners and a South African national with a long-standing claim for expropriation in Lesotho are among the most vocal critics of the review process.

They complain that SADC member-states have declined to renew the appointments – or nominate replacements – for four judges whose terms expired, leaving the part-time tribunal critically short-handed while the review process has unfolded.

The aforementioned litigants complain darkly that the SADC Heads of State are seeking to undermine the “proper working” of the tribunal, by limiting its ability to handle new and existing cases.

Indeed, in papers filed in late March by lawyers for claimants in the earlier Campbell v. Zimbabwe case, members of the SADC tribunal were urged to continue operating and to issue a ruling which affirms that the review process initiated by SADC member-governments does not suspend the tribunal’s operations and functioning.

A similar action was filed in January of this year by a group of litigants seeking to pursue a pending claim before the tribunal in a long-running dispute over the cancellation of mining leases in Lesotho.* In a recent email communication with IAReporter, the lead claimant in the Lesotho matter, Mr. Josiah van Zyl warned that certain governments are seeking to neuter the tribunal in an effort to avert “massive financial claims resulting from their … international law violations”.

For now, however, it seems unlikely that the tribunal will issue any sort of affirmation of its own authority, preferring instead to keep its head down while heads of state debate the body’s future.

Supporters of tribunal are heartened by consultant’s report

While claimants with cases before the tribunal have complained loudly about the purported illegality of the review process, other observers are expressing guarded optimism that the review process will not permanently hobble the tribunal.

Nicole Fritz, Director of the Southern African Litigation Centre, is one of a number of civil society groups that has pressed the SADC governments to “strengthen”, rather than undermine, the regional tribunal.

In an interview with IAReporter, she confessed that she and her organization had been dismayed when the SADC Summit commissioned its review of the tribunal. However, Ms. Fritz is relieved that the subsequent recommendations arising out of that review process have affirmed the role of the tribunal, and sought to shore up its work.

She concedes that everything now hangs on the Extraordinary Summit to be held this month.

Her group cautions that any effort by the member-states to curb the tribunal’s powers would be a set-back for human rights, but also for foreign investors – who currently enjoy extensive legal protections under the broadly-drafted SADC treaty.

For a detailed review of the contents of Dr. Bartels' report, and its relevance to international dispute specialists, see this separate article (subscribers only).

* South African national Josiah van Zyl had sought to challenge the cancellation in the Lesotho courts, and when this proved unsuccessful he petitioned the South African authorities to provide diplomatic protection in relation to the dispute. When South Africa declined to do so, Mr. van Zyl turned to the South African courts, in an unsuccessful bid to force the issue. After striking out in the courts of Lesotho and South Africa, brought claims for expropriation and denial of justice against South Africa and Lesotho to the SADC tribunal in June of 2009. It is these latter claims which Mr. van Zyl fears to be in limbo as a result of the SADC Summit’s recent decision to initiate a review of the tribunal.

Investment Arbitration Reporter is a specialized news publication tracking developments in the area of international investment law and policy.

The publication does not offer legal or financial advice or recommendations of any kind.
 
To offer news-tips or comments, email the Editor, Luke Eric Peterson, at: editor@iareporter.com