Dubai-headquartered terminal operator DP World has won another legal hearing against the government of Djibouti over the Doraleh Container Terminal.
A tribunal of the London Court of International Arbitration has ruled against Djibouti’s port company, Port de Djibouti S.A. (PDSA), in its dispute with DP World, confirming that PDSA breached the joint venture agreement by wrongfully attempting to terminate it, and by engaging in the attempted transfer of its shares to the government. The tribunal ruled that the joint venture agreement was not terminated and remains in full force and effect.
The new ruling is the seventh decision by an international court or tribunal in favour of DP World in its ongoing dispute with the government of Djibouti, which has yet to comply with any of these rulings. Despite three years having passed, Djibouti is yet to come forward with any offer of compensation in an effort to find a negotiated settlement to the dispute.
DP World has had a concession in Djibouti since 2006. In February 2018, the government terminated DP World’s contract and has since nationalised the Doraleh Container Terminal, managed under a joint venture between DP World and PDSA.
PDSA is 23.5% owned by China Merchants and the rest of its shares are held by the government of Djibouti. The arbitration will now proceed to a second phase to decide the damages owed by PDSA to DP World. PDSA has also been ordered to reimburse DP World’s legal costs to date in the sum of £1.7m ($2.34m).