Djibouti rejects court ruling on DP World dispute

05 August 2018
London Court of International Arbitration determined the concession agreement remains "in full force"

Dubai-based ports operator DP World has said the Djibouti government’s refusal to acknowledge an international tribunal decision to uphold the validity of a concession agreement for the Doraleh Container Terminal demonstrates that it does not recognise the international rule of law.

Citing a decision by the London Court of International Arbitration, DP World said the Djibouti government does not have sovereignty over a contract governed by English law.

"It is well established that, in the absence of an express term to that effect, an English law contract cannot be unilaterally terminated at will. The contract therefore remains in full force and effect,” DP World said

In February, DP World filed an arbitration case in London against the government of Djibouti, which it has accused of illegally seizing control of the Doraleh Container Terminal, which it designed, built and has been operating since 2006.

DP World was seeking to secure damages and compensation for the expropriation of the terminal.

MEED understands DP World has a 33 per cent equity stake in the port of Doraleh, whose container terminal has a capacity of 1.25 million twenty-foot equivalent units (TEUs).

The Djibouti government began making corruption allegations against DP World in 2014.

Last month, DP World said that the Djibouti government’s seizure of the Doraleh Container Terminal does not give any third party the right to violate the terms of the 30-year concession agreement it signed with the government in 2006.

The ports operator issued the statement in response to the opening of the first phase of the Chinese-built Djibouti International Free Trade Zone, which is located close to all of Djibouti’s major ports.

A DP World spokesperson warned that the firm “reserves the right to take all available legal actions, including claims for damages against any third parties that interfere or otherwise violate its contractual rights.”

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