DP World accuses Djibouti gov't of illegally seizing port terminal

Company starts new arbitration, says gov't action is 'particularly oppressive and cynical'
DP World accuses Djibouti gov't of illegally seizing port terminal
By Staff writer
Fri 23 Feb 2018 01:12 AM

Dubai-based port operator DP World has accused the Government of Djibouti of illegally seizing control of the Doraleh Container Terminal.

The company said in a statement that the seizure of the terminal is the culmination the government’s campaign to force DP World to renegotiate the terms of the concession.

It added in comments published by state news agency WAM that those terms were found to be "fair and reasonable" by a London Court of International Arbitration tribunal led by Lord Leonard Hoffman and Sir Richard Aikens, both highly respected former English jurists.

The concession was awarded by the government in 2006. The terminal is the largest employer and biggest source of revenue in the country. It has operated at a profit every year since it opened, DP World said.

DP World added that it has commenced arbitration proceedings before the London Court of International Arbitration to protect their rights, or to secure damages and compensation for their breach or expropriation.

Since December 2017, the Government of Djibouti has sought to enforce the law against the concession contract related to the container terminal at Doraleh.

This effort culminated in a final demand that the contract be renegotiated by Wednesday, and the termination of that contract by Presidential Decree on Thursday along with the expropriation of all of the assets of Doraleh Container Terminal.

DP World said: "We consider the law, the attempt of the Government to enforce its terms, the purported termination and expropriation to be in breach of the Government’s obligations under its agreements with us, in force since 2004, and international law. Moreover, the Government’s conduct is particularly oppressive and cynical.

"To protect our interests, we have been compelled to commence a new arbitration on February 20 against the government in London, seeking a declaration that the contracts are valid and binding on the Government and to obtain urgent interim relief.

"We demand that the government will cease its unlawful conduct and continue to work as partners with us in the same spirit of cooperation that has been in place for the last 18 years, which has yielded hundreds of millions of dollars of direct and indirect benefits to Djibouti and enhanced its attractiveness as a leading investment destination in East Africa."

For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.