DP World stands against a decision to be taken later this week by the government of Djibouti to implement the country’s high court to rule all previous international adjudications. The company said that such a decision 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
DP World stated.
Doraleh Container Terminal SA (DCT) 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. However, Djibouti did not consider them, in spite the fact that the original contract for the concession is written under English law.
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The most recent decision by an LCIA Tribunal on 29 March, 2019, decided that by developing new container port opportunities with China Merchants Port Holdings Co Limited (China Merchants), Djibouti has violated DCT’s rights under its 2006 Concession Agreement to build a container terminal at Doraleh, in Djibouti, specifically, its exclusivity regarding all container handling facilities in the territory of Djibouti.
The Tribunal ordered Djibouti to pay DCT $385.7 million plus interest for breaching DCT’s exclusivity by development of container facilities at Doraleh Multipurpose Terminal, with additional damages possible if Djibouti develops a planned Doraleh International Container Terminal (DICT) with any other operator without DP World agreeing.
The Tribunal also ordered Djibouti to pay DCT $88 million for historic non-payment of royalties for container traffic not transferred to DCT, when it started operations. Djibouti is also ordered to pay DCT’s legal costs.
DP World added that:
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
