Dubai Ports World (DP World) has confirmed that the move by the government of Djibouti to take action later this week by prompting the country's Supreme Court to disregard all previous international rulings on the Durale Container Terminal SA (DCT), is a flagrant violation of the global judicial system.
In a statement issued on Wednesday, Dubai Ports World said: “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."
The dispute revolves around DCT which is a joint venture owned 66.66 percent by Port of Djibouti (an entity of the Republic of Djibouti) and 33.34 percent by DP World.
In February 2018 Djibouti ended its contract with DP World to run DCT, following a dispute between both parties. DP World called the move an illegal seizure of the terminal and moved to international arbitration.
In the past three years, five successful rulings against Djibouti were made by the London Court for International Arbitration (LCIA) and the High Court of England and Wales.
Djibouti ignored all of these rulings despite the original concession being written in English law, DP World said in its statement.
The LCIA Tribunal’s most recent decision in March of this year found that by developing new container port opportunities with China Merchants Port Holdings Co Limited, a Hong-Kong based port operator, Djibouti had breached DCT’s exclusivity rights over all container handling facilities in the territory of Djibouti.
The Tribunal ordered that Djibouti pay DCT $385.7 million plus interest for breaking the exclusivity cause, with further damages possible should Djibouti develop a planned Doraleh International Container Terminal (DICT) with any other operator without the consent of DP World.
The Tribunal has also ordered Djibouti to pay DCT an additional $88 million for historic non-payment of royalties on container traffic that were not transferred to SDCT once it became operational – in addition to DCT’s legal costs.
The 2006 Concession Agreement remains valid and binding according to the Tribunal, a position which has been agreed by another LCIA Tribunal and 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,” the statement added.
The statement added that litigation against China Merchants also continues before the Hong Kong courts.
