UK High Court grants injunction to protect DP World deal in Djibouti

High Court of England & Wales seeks to restrain Djibouti's port company from treating its agreement with Dubai's DP World as terminated
UK High Court grants injunction to protect DP World deal in Djibouti
By Sam Bridge
Wed 05 Sep 2018 02:49 PM

The High Court of England & Wales has granted an injunction restraining Djibouti’s port company, Port de Djibouti SA (PDSA), from treating its agreement with Dubai's DP World as terminated.

The High Court has further prohibited PDSA from removing directors of the Doraleh Container Terminal joint venture company who were appointed by DP World, said a statement issued by Dubai Government on Wednesday.

The injunction also says that PDSA is not to interfere with the management of the terminal until further orders of the court or the resolution of the dispute by a London-seated arbitration tribunal.

The High Court’s order follows the attempt by PDSA to terminate the joint venture agreement with DP World and the calling of an extraordinary shareholders’ meeting on September 9 by PDSA to replace DP World-appointed directors of the DCT joint venture company. 

This is the third legal ruling in relation to the Doraleh Container Terminal following two previous decisions from the London Court of International Arbitration (LCIA), all of them in favour of DP World.

It recognises that although PDSA is the majority shareholder of the DCT joint venture company, it is DP World that has management control of the company, in accordance with the parties’ legally binding contracts.

If PDSA disobeys the court’s order and seeks to replace DP World nominated directors of DCT on Sunday, it may be in contempt of court and face a fine or the seizure of its assets and its officers and directors may be imprisoned, the statement said.

It added that the court has ordered PDSA to present its defence at another hearing on September 14.

DP World said it is notifying Standard Chartered Bank so that the bank will reject any instructions that may be sent to them after the September 9 meeting.

China Merchants, who have been given operational control of the Djibouti Freezone in breach of DP World’s exclusivity rights, will also be informed given its minority shareholding in PDSA, which is owned in majority by the Government of Djibouti.

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