DP World slams Djibouti gov't as port dispute rumbles on

Dubai-based port operator says gov't bid to dismiss previous court rulings shows 'complete disregard' for legal system
DP World slams Djibouti gov't as port dispute rumbles on
By Sam Bridge
Wed 31 Jul 2019 04:23 PM

Dubai-based DP World on Wednesday slammed the Government of Djibouti for continuing to disregard for the legal system in an ongoing dispute over the Doraleh Container Terminal.

The port operator said in a statement that a decision to be taken later this week by the government to apply to the country’s high court to rule all previous international adjudications null and void is a complete disregard for and contravention of the global legal system and existing contracts.

Doraleh Container Terminal (DCT), a Djibouti port operator owned 33.34 percent by DP World Group, and 66.66 percent by Port de Djibouti, an entity of the Republic of Djibouti, has been successful in five previous rulings over the last three years by the London Court for International Arbitration in London and the High Court of England and Wales.

All have been ignored by Djibouti despite the original contract for the concession being written under English law, DP World said. 

The most recent decision in March found that by developing new container port opportunities with China Merchants Port Holdings Co Limited, a Hong-Kong based port operator, Djibouti has breached DCT’s rights under its 2006 concession agreement to develop a container terminal at Doraleh.

The tribunal ordered Djibouti to pay DCT $385.7 million plus interest for breach of DCT’s exclusivity by development of container facilities at Doraleh Multipurpose Terminal, with further damages possible if Djibouti develops a planned Doraleh International Container Terminal (DICT) with any other operator without the consent of DP World.

It also ordered Djibouti to pay DCT $88 million for historic non-payment of royalties for container traffic not transferred to DCT once it became operational. Djibouti was also ordered to pay DCT’s legal costs.

"DCT and DP World continue to seek to uphold their legal rights in a number of legal fora, following Djibouti’s unlawful efforts to expel DP World from Djibouti and transfer the port operation to Chinese interests," the statement said.

It added that litigation against China Merchants also continues before the Hong Kong courts.

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