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Abu Dhabi, UAEMonday 23 July 2018

DP World denies out-of-court settlement in Djibouti port dispute

The African country abruptly cancelled the port operator's contract in February

DP World said the move to take control of the port was illegal and began court proceedings. Ahmed Jadallah/Reuters
DP World said the move to take control of the port was illegal and began court proceedings. Ahmed Jadallah/Reuters

DP World, the fourth biggest port operator globally, will not consider alternative legal options outside a court settlement in a dispute with the Djibouti government over the Doraleh Container Terminal.

The Nasdaq-listed company is awaiting a ruling by the International Arbitration Court in London, a DP World spokesman said in a statement Saturday, in response to media reports that it is considering settling the matter outside the court.

“We await the outcome of this process,” a DP World spokesperson said. “We remain committed to operating Doraleh port as per the original agreement of the concession, and we will not consider any other alternative settlement option.”

In February, the Djibouti authorities abruptly cancelled DP World’s contract to run the Doraleh terminal. DP World said the move to take control of the port was illegal and began court proceedings. The UAE denounced Djibouti’s termination of DP World’s concession, calling it an “arbitrary” breach of a signed agreement. The port operator said in March that it would consider it illegal if any third-party entered into an agreement or arrangement with the Djibouti government related to the port.

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DP World is facing a dual challenge in Africa where Somalia’s parliament voted in March to ban the company. DP World’s terminals in Europe, Middle East and Africa, which also includes the home port of Jebel Ali in Dubai, recorded the strongest growth in the first quarter of 2018, up 9.8 per cent.

Despite the headwinds it's facing in Africa, the company remains bullish on African markets’ potential for growth and has continued to expand there.

In May, DP World signed a preliminary agreement with Egypt’s Suez Canal Authority and government to jointly develop a new inland container depot that will boost the flow of cargo between ships and major land transport networks in the country.

It won a 30-year concession to develop a $1 billion deep-water port along the Democratic Republic of Congo’s Atlantic coast in March. DP World will get a 70 per cent stake and the DRC government keeps a 30 per cent holding in the project. Construction will start this year and finish in two years.