|23 February, 2018

DP World takes legal action against Djibouti for illegal seizure of Doraleh port

Terminal has been responsible for creation of thousands of jobs in East African nation

Image used for illustrative purpose. A ship is moored as its containers are unloaded at the Jebel Ali port in Dubai June 27, 2006.

Image used for illustrative purpose. A ship is moored as its containers are unloaded at the Jebel Ali port in Dubai June 27, 2006.

REUTERS/Regi Varghese

UAE - Violating international norms, Djibouti's government has illegally seized control of the Doraleh Container Terminal from DP World, forcing the Dubai-based company to resort to the London Court of International Arbitration to protect its rights.

As part of an agreement between the two parties, DP World designed, built and operated the port since 2006, which resulted in the creation of thousands of direct and indirect jobs in the East African nation.

According to DP World, the Doraleh Container Terminal has been operating at a profit since its opening and the African government was on a campaign, as of late, to force it to renegotiate the terms of concession. The two parties had signed the concession agreement for 30 years.


But the government of Djibouti violated the agreement and issued a final demand that the contract be renegotiated by February 21, 2018, and terminated that contract by a Presidential Decree on February 22, and expropriation of all of the assets of the Doraleh Container Terminal.

"The [Djibouti] government's conduct is particularly oppressive and cynical. The government only recently failed in its attempts to unravel the contracts by alleging the contracts were corrupt both before the High Court of England & Wales and before an arbitral Tribunal in London [comprising Sir Richard Aikens, Peter Leaver QC, Lord Hoffman], which dismissed the government's allegations that the contracts were unfair in their entirety," DP World said in a statementon Friday.

DP World said it had commenced arbitration proceedings before the London Court of International Arbitration to protect their rights, or to secure damages and compensation for their breach or expropriation.

The terminal - where DP World holds a 33.33 per cent stake - is one of the most technologically-advanced container terminals in the African continent and is just 11km south of the International Autonomous Port of Djibouti. Its lies on the major east-west trade route with minimal deviation.

DP World asked the government of Djibouti to cease its unlawful conduct and continue to work as partners in the same spirit of cooperation that has been in place for the last 18 years.

Recently, the Dubai firm signed $3 billion worth of agreements with India's National Investment and Infrastructure Fund, reflecting the company's professionalism in running its operations of the world.

In 2017, DP World handled 70.1 million TEU (twenty-foot equivalent units) across its global portfolio of container terminals in the full year of 2017, with gross container volumes growing by 10.1 per cent year-on-year. From its Europe, Middle East and African region, it handled 29.35m TEU last year as compared to 26.33 million TEU in the previous year.

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