Abu Dhabi, UAEWednesday 22 January 2020

DP World wins another ruling against Djibouti for illegal terminal seizure

The London Court of International Arbitration ordered Djibouti to restore DP World's rights and benefits under the 2006 concession agreement

Authorities in Djibouti in February 2018 abruptly cancelled DP World’s contract to run the terminal and seized its facilities, which the port operator had designed, built and operated. Reuters
Authorities in Djibouti in February 2018 abruptly cancelled DP World’s contract to run the terminal and seized its facilities, which the port operator had designed, built and operated. Reuters

Dubai-based DP World, the world's largest port operator, won another legal challenge against the Government of Djibouti over its illegal seizure of the container terminal at Doraleh.

A tribunal of the London Court of International Arbitration ordered Djibouti to restore the rights and benefits under the 2006 concession agreement to DP World and Doraleh Container Terminal within two months, or pay damages, the company said in a statement on Tuesday.

Djibouti acted illegally when it forcibly removed DP World from management of the terminal in February 2018, claiming it had terminated the concession agreement and transferred the terminal assets to a state-owned entity, according to the ruling by the tribunal. An independent expert has estimated losses to DP World from the unilateral move at more than $1 billion (Dh3.67bn), the port operator said.

The latest tribunal ruling is the sixth substantive judgment in DP World’s favour in the London Court of International Arbitration and the High Court of England and Wales. The government of Djibouti, to date has ignored all rulings, despite the original contract for the concession being written under and governed by English law, DP World noted.

Last July the Djibouti government applied to the country’s high court to rule all previous international adjudications as null and void, a move DP World said was a "complete disregard for, and contravention of" the legal system and existing contracts.

"The move is proof of Djibouti’s complete disregard for recognised legal practice and respect for contracts calling into question any investment in the country both now and in the future," DP World said in a statement at the time.

The Doraleh Container Terminal is the largest employer in Djibouti and biggest source of revenue in the country, turning profit every year since it opened.

DP World said it now awaits proposals from Djibouti about how it intends to comply with the latest legal ruling.

“If Djibouti does not comply with the ruling, the tribunal has stated it will proceed to issue an award of damages,” the company noted.

A panel in March ordered the African nation to pay $385 million plus interest for breach of the Doraleh Container Terminal holding company’s exclusive rights.

DP World is an integral part of the global trade supply chain. It operates multiple related businesses – from marine and inland terminals, maritime services, logistics and ancillary services to technology-driven trade solutions.

With a portfolio of 78 marine and inland terminals supported by more than 50 related businesses in more than 40 countries, the company enjoys strong relationships with governments around the world.

Updated: January 14, 2020 02:24 PM

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