ZIMBABWE Law and Practice Contributed by: Nikita Madya and Chantele Sibanda, Wintertons
“New York Convention”). Accordingly, foreign inves- tors are free to resort to international arbitration, and awards from such arbitration proceedings are recog- nised and enforced in Zimbabwe. Zimbabwe also ratified the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States, which was incorporated into Zimbabwean law by the Arbitration (International Investment Disputes) Act (Chapter 7:03). This deals specifically with investment disputes. The New York Convention requires courts of contracting states to give effect to private arbitration agreements and to recognise and enforce arbitration awards made in the contracting countries. In accordance with the terms of Article 3 of the New York Convention, each contracting state must recognise arbitral awards as binding and enforce them in compliance with the rules of procedure of the territory where the award is relied upon. Various tax incentives can be negotiated and granted by the government, including exemptions on duty on the importation of capital goods. It is possible to nego- tiate for a project to be granted National Project Status so as to qualify for various exemptions on duties on the importation of capital goods into the country. 1.4 Sale of Power Industry Assets Licences are not transferable. ZERA is required to approve any mergers or acquisitions of assets. The sale of power industry assets or businesses, or other transactions, is subject to control by the Competition and Tariff Commission (CTC), which was established by the Competition Act (Chapter 14:28), and which requires that all notifiable mergers that are at or above the notifiable merger threshold are approved by it. A merger is defined in the Competition Act as “the direct or indirect acquisition or establishment of a con- trolling interest by one or more persons in the whole or part of the business of a competitor, supplier, cus- tomer or other person whether that controlling interest is achieved as a result of: • the purchase or lease of the shares or assets of a competitor, supplier, customer or other person;
• the amalgamation or combination with a competi- tor, supplier, customer or other person; or • any means other than as specified in paragraph (a) or (b)”. A notifiable merger refers to a merger or proposed merger with a value at or above the prescribed thresh- old of USD1.2 million in either the combined annual turnover of the acquiring firm and the target firm, or the combined assets in Zimbabwe of the acquiring firm and the target firm. The process typically involves notifying the CTC of the proposed merger and paying the fees required, which are based on the combined annual turnover or com- bined value of the assets in Zimbabwe of the merging parties (whichever is greater), subject to a minimum of USD10,000 and a maximum of USD50,000. The pro- cess can take up to 90 business days. If the approval is granted, the CTC may impose any conditions it deems fit to ensure that competition is enhanced. These may include directives to dispose of certain services provided or the disposal of certain assets over a given period of time. 1.5 Central Planning Authorities ZERA is mandated to regulate the entire energy sec- tor in Zimbabwe in a fair, transparent, efficient and cost-effective manner for the benefit of consumers and energy suppliers. ZERA derives its mandate from the ERA Act, as read together with the Electricity Act and regulations made thereunder. Section 4 of the Electricity Act creates and empowers ZERA to regulate the procurement, production, trans- portation, transmission, distribution, importation, and exportation of energy derived from any energy source (renewable or non-renewable energy), as defined in Section 4 of the ERA Act. ZERA’s functions include: • creating, promoting, and preserving efficient indus- try and market structures for the provision of elec- tricity services, and ensuring the optimal utilisation of resources for the provision of such services;
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