Court backs DP World's injunction case against Djibouti port operator

September 21 ruling by the High Court of England and Wales upholds ruling from August 31
Court backs DP World's injunction case against Djibouti port operator
The ruling, which was first made on August 31 following a suit brought by Dubai’s DP World, prevents the company from interfering with the management of the joint venture company, Doraleh Container Terminal.
By Eddie Taylor
Mon 24 Sep 2018 08:10 AM

The High Court of England and Wales in London has ordered that the injunction over Djibouti port operator Port de Djibouti should continue.

The ruling, which was first made on August 31 following a suit brought by Dubai’s DP World, prevents the company from interfering with the management of the joint venture company, Doraleh Container Terminal.

The ruling details four key provisions for the Doraleh Container Terminal:

- It shall not act as if the joint venture agreement with DP World has been terminated.

- It shall not appoint new directors or remove DP World’s nominated directors without its consent.

- It shall not cause the Doraleh Container Terminal joint venture company to act on “Reserved Matters” (being matters contractually reserved to DP World) without DP World’s consent.

- It shall not instruct or cause Doraleh Container Terminal to give instructions to Standard Chartered Bank in London to transfer funds to Djibouti.

It further added that the injunction will remain in force until it makes a further order or the arbitration tribunal at the London Court of International Arbitration (“LCIA”), formed to consider the shareholding dispute, will issue an award.

The Court also ordered that any transferee of Doraleh shares is legally bound by the Joint Venture Agreement and Articles of Association in the same way as PDSA – a ruling that means neither the Government, the majority shareholder, nor PDSA can control DCT or give valid instructions to third parties on behalf of DCT without DP World’s consent.

The rulings follow a hearing on September 14 at which Port de Djibouti failed to appear.

In February 2018, the Djibouti government cancelled DP World’s contract, signed in 2006, to run the Doraleh Container Terminal. DP World claimed this attempted renationalisation was illegal and began court proceedings, resulting in the August injunction in London.

After the first ruling, DP World confirmed that it will continue to pursue all legal means to defend its rights as shareholder and concessionaire in the Doraleh Container Terminal, accusing the Djibouti government of a “blatant disregard for the rule of law”.

The company also issued a warning to other companies seeking to operate in the East African country.

In a separate proceeding, a tribunal at the London Court of International Arbitration ruled that the 2006 Concession Agreement between the government of Djibouti and DP World was fair and free from corruption.

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