Impending Djibouti Action to Denounce Rule of Law A Warning to Business Investors

Application to have high court in Djibouti rule international adjudications null and void contravenes global legal system and threatens investment

�

DUBAI, UAE - Media OutReach - 1 August 2019 – A
decision to be taken later this week by the government of Djibouti 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.

 

The move is
proof of Djibouti’s complete disregard for recognized legal practice and
respect for contracts calling into question any investment in the country both
now and in the future.

 

Doraleh
Container Terminal SA (DCT), a Djibouti port operator owned 33.34% by DP World
Group, and 66.66% by Port de Djibouti S.A., an entity of the Republic of
Djibouti, has been successful in five previous substantial 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.  

 

The most
recent decision by an LCIA Tribunal on 29 March this year found that by
developing new container port opportunities with China Merchants Port Holdings
Co Limited (China Merchants), a Hong-Kong based port operator, Djibouti has
breached DCT’s rights under its 2006 Concession Agreement to develop a
container terminal at Doraleh, in Djibouti, specifically, its exclusivity over
all container handling facilities in the territory of Djibouti. 

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.

The
Tribunal 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 is also ordered to pay DCT’s legal costs.

The Tribunal’s Award recognises that the 2006 Concession Agreement remains
valid and binding, as has also been confirmed by another LCIA Tribunal and the
English courts.  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.

 

Litigation
against China Merchants also continues before the Hong Kong courts. DP World
has previously issued public notices, following the confirmation of the
validity of the 2006 Concession Agreement in a judgment in 2018, warning others
against interfering with its and DCT’s concession rights.

About DP World:

DP
World is a leading enabler of global trade and an integral part of the supply
chain. 

We
operate multiple yet related businesses — from marine and inland terminals,
maritime services, logistics and ancillary services, to technology-driven trade
solutions.

We
have a portfolio of over 150 operations in over 45 countries across six
continents, with a significant presence in both high-growth and mature markets.
We aim to be essential to the bright future of global trade, ensuring that
everything we do contributes positively and sustainably to both the economy and
society.

Our
dedicated team of more than 46,000 employees from 120 countries cultivates long-standing
relationships with governments, shipping lines, importers and exporters,
communities, and many other important constituents of the global supply chain,
providing quality value-added services today and tomorrow.

Container
handling is the company’s core business and generates more than 50% of its
revenue. In 2018, DP World handled 71.4 million TEU (twenty-foot equivalent
units) across our portfolio. With its committed pipeline of developments and
expansions, the current gross capacity of 91 million TEU is expected to rise in
line with market demand.

By
thinking ahead, foreseeing change and innovating, DP World aims to create the
most productive, efficient and safe trade solutions globally.

Follow DP World on:
Twitter: https://twitter.com/DP_World
LinkedIn: https://www.linkedin.com/company/dp-world