US embassy cable - 04MAPUTO1539

UNCLAS MAPUTO 001539 
 
SIPDIS 
STATE FOR AF/S, AF/EPS, EB/IFD/OIA, E 
MCC FOR APPLEGARTH, HEWKO, BRIGGS, GAULL 
STATE PASS OPIC FOR SHORE 
SENSITIVE 
E.O. 12958: N/A 
TAGS: EINV, MZ, Nyati, Tourism, MCC 
SUBJECT: MOZAMBICAN ATTORNEY GENERAL REFERS NYATI LODGE CASE 
TO HIGH COURT 
 
Ref: Maputo 01446 
 
Sensitive but Unclassified - Business Confidential 
Information. Not for Internet Distribution 
 
1. (SBU) On November 25, Attorney General Joaquim Madeira 
referred to the High Court of Mozambique a motion by 
Vilanculos Coastal Wildlife Sanctuary to suspend an October 
court order by Inhambane provincial judge Jose Sampaio that 
authorized expropriation of the Nyati Beach Lodge. The 
Lodge is co-owned by American investor David Herbert, who 
has received OPIC support for his investment. The Attorney 
General also recommended that the High Court suspend the 
provincial judge's earlier decision, which had enabled the 
Zimbabwean company Cabo do Mar to attempt several failed 
expropriations of Mr. Herbert's property based on an earlier 
land rights claim. Reftel provides details on the dispute. 
On November 23, Ambassador La Lime had met with the Attorney 
General to seek prompt action on the matter. The Attorney 
General had indicated that he would refer the case to the 
High Court with a recommendation to suspend the order. 
 
2. (SBU) The Attorney General's move represents a positive 
step for Mr. Herbert in his efforts to protect his 
investment in the lodge. Over the past month, Mr. Herbert 
and his legal teams had made several unsuccessful attempts 
to obtain an order from Judge Sampaio suspending enforcement 
of his October order. Based on his perceived vulnerability, 
Mr. Herbert and his team had negotiated a $650,000 
settlement with Cabo do Mar on October 28 in exchange for 
Cabo do Mar's agreement never to evict them. This 
settlement has been drafted but has not been signed, and 
Cabo do Mar has responded by upping its cash demands. It 
also attempted to take over Nyati Lodge on November 17 and 
again on November 20, each time with a private security 
force in tow. The Cabo do Mar security forces were fended 
off without incident, but Mr. Herbert believed that, without 
a favorable decision by the Attorney General, he probably 
would have been forced to meet Cabo do Mar's demands in 
order to keep his business. 
. (SBU) A referral to the High Court does not end the legal 
dispute between Cabo do Mar and Mr. Herbert. The High Court 
often takes months to decide cases, and Cabo do Mar is 
likely to attempt further evictions in the meantime. Mr. 
Herbert and his legal advisors believe that the Attorney 
General's decision to issue a recommendation along with the 
referral should help them, but admit that this is not always 
the case. Post believes that Mr. Herbert eventually will 
probably end up paying some form of settlement to Cabo do 
Mar in order to settle the issue of overlapping land claims. 
In any case, the Attorney General's decision should 
strengthen Mr. Herbert's position in his dealings with Cabo 
do Mar. 
LA LIME