DP World to fight Djibouti container terminal seizure

25 February 2018
DP World has a 33 per cent equity stake in the port of Doraleh, which it has been operating under a concession agreement since 2006

Dubai-based ports operator DP World  filed a new arbitration case in London on 20 February against the government of Djibouti, which it has accused of illegally seizing control of the Doraleh Container Terminal. DP World designed, built and has been operating the container terminal under a concession agreement signed in 2006.

“To protect our interests, we have been compelled to commence a new arbitration on 20 February 2018 against the [Djibouti] Government in London, seeking a declaration that the contracts are valid and binding on the Government and to obtain urgent interim relief,” DP World said in a statement.

DP World said they are seeking to secure damages and compensation for their breach or expropriation.

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

DP World said the illegal seizure of the terminal is the culmination the Djibouti government’s campaign to force the DP World to renegotiate the terms of the concession.

“Since December 2017, the Government of Djibouti has sought to enforce the law against the concession contract entered into between DP World and Doraleh Container Terminal and the Government, related to the container terminal at Doraleh,” a DP World statement said. “This effort culminated in a final demand that the contract be renegotiated by 21 February 2018, and the termination of that contract by Presidential Decree on 22 February 2018 and expropriation of all of the assets of Doraleh Container Terminal.”

The ports operator said it considers “the law, the attempt of the Government to enforce its terms… to be in breach of the Government’s obligations under its agreements with us, in force since 2004, and international law.”

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

During that year, MEED reported that the case was in international arbitration, with the Djibouti government saying it was hoping to secure losses allegedly incurred from actions taken by the port operator.

DP World has previously faced disputes with local port authorities and governments.

In 2012, the company exited from management of its port operations in Yemen, following various allegations against it by the government surrounding claims DP World had not fulfilled its contractual obligations.

However, the port operator subsequently argued that it exited Yemen that year due to the country’s instability.

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