Djibouti launches legal action against DP World

Djibouti launches legal action against DP World
Doraleh Container Terminal, Djibouti

The government of Djibouti has initiated legal action against DP World as it seeks to rescind the terminal operator’s concession in Doraleh, alleging that bribery was used to secure the contract in 2000.

The government said in a statement that “the resulting agreement unfairly favoured DP World”, and that it rescinded the 20-year concession and would launch a case before the London Court of International Arbitration after out-of-court negotiations failed.

The Dubai-based operator has strongly denied the allegations.

“We categorically reject the accusations and will vigorously defend our position during arbitration,” it said in a statement. “We are disappointed that the government has chosen to take this action after working so closely with us as partners over the past 14 years.

“We have invested significantly in Djibouti over those years and have been a major contributor to its economy and to its community. It is surprising the accusations come from a government whose parliament ratified our concession,” said the company.

The government said the case arose from an investigation of Abdourahman Boreh, former chairman of the Djibouti Ports and Free Zones Authority, against whom it has launched numerous actions in recent years as well as obtaining a global freezing order on his assets.

It is alleged that the Dubai-based Boreh misused his government position for personal gain. A major case is scheduled to go to trial in London next year.

Djibouti claims to have uncovered evidence “indicating that DP World paid bribes and gave other forms of financial incentives to Mr. Boreh while he was negotiating the Doraleh Container Terminal concession with DP World, as well as afterwards.”

The bribes, the Djibouti government alleged, were made through consultancy agreements and foreign shell companies.

According to its latest annual report, the company owns one third of Doraleh Container Terminal. DP World will continue to operate the terminal during the arbitration proceedings.

A former French colony, Djibouti hosts a French military base and the only US military base in Africa. Its port is used by foreign navies policing the Gulf of Aden’s shipping lanes, some of the busiest in the world, against pirates from Somalia, which borders the country to the south.