Djibouti ordered by London court to restore DP World’s container terminal concession

Djibouti ordered by London court to restore DP World’s container terminal concession

Update (January 17, 2020):

The Republic of Djibouti stated that the ruling “comes as no surprise” but has said that that under no circumstances can it accept such a ruling as Djibouti did not take part and it “flouts the rules of international law”.

The Republic of Djibouti reasserted that the termination of the concession for DCT was decided in the context of a legal framework that had previously been adopted by the Djiboutian parliament on November 8, 2017.

It alleged that DP World’s operation of the terminal had proved to be contrary to the fundamental interests of the nation.

The Republic of Djibouti stated: “Its continuation would have seriously harmed Djibouti’s economic and social priorities by placing unacceptable restrictions on its development policy and giving a foreign-owned company total control over one of its most strategic infrastructure.”

Djibouti has reported that DCT has increased its activity by 30% since it terminated the agreement.

Since the termination of the concession, the Republic of Djibouti has consistently indicated that “the only possible outcome is allocation of fair compensation in accordance with international law”.

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A Tribunal of the London Court of International Arbitration has ordered Djibouti to restore the rights and benefits for the Doraleh Container Terminal (DCT) to DP World and Doraleh Container Terminal SA within two months or pay damages.

The ruling of the Tribunal said that the government of Djibouti had acted illegally when it forcibly removed DP World from management of the terminal in February, claimed it had terminated the 2006 concession agreement and transferred terminal assets to a state-owned entity.

The London Court of International Arbitration and the High Court of England and Wales have ruled in DP World’s favour, including the latest tribunal ruling, six substantive times.

However, Djibouti has ignored all of these to date despite the original contract for the concession having been written under and governed by English law.

DCT is the largest employer and biggest source of revenue in Djibouti, having operated at a profit every year since it opened.

An English court found that the DCT had been “a great success” for Djibouti under DP World’s management.

DP World has a portfolio of 78 operating marine and inland terminals and is a leading enabler of global trade, operating multiple related businesses.