Dubai-based terminal operator DP World has launched new arbitration proceedings in London against the Government of Djibouti over the latter’s decision to terminate the concession contract with the company for Doraleh Container Terminal (DCT).
“To protect our interests, we have been compelled to commence a new arbitration on February 20, 2018 against the government in London, seeking a declaration that the contracts are valid and binding on the government and to obtain urgent interim relief,” the company said in a statement.
As World Maritime News reported yesterday, Djibouti terminated the concession contract awarded in 2006 to DP World for the operation of DCT.
DP World dubbed the move “illegal seizure of control” and a culmination of the government’s campaign to force the company to renegotiate the terms of the concession.
Those terms were found to be “fair and reasonable” by a London Court of International Arbitration tribunal in February 2017, when the court ruled in favor of DP World in an arbitration case dating back to 2014.
To remind, Djibouti launched legal action against DP World for alleged bribing of Abdourahman Boreh, the head of the country’s port and free zone authority, to secure the 30-year concession to run DCT. DP World was cleared of all charges of misconduct.
In the aftermath of the court decision, i.e., since December 2017, the Government of Djibouti has sought to enforce the law against the concession contract for the terminal, the Dubai company added.
” This effort culminated in a final demand that the contract is renegotiated by February 21, 2018, and the termination of that contract by Presidential Decree on February 22, 2018 and expropriation of all of the assets of Doraleh Container Terminal SA,” the company statement reads.
“We consider the law, the attempt of the Government to enforce its terms, the purported termination and expropriation to be in breach of the Government’s obligations under its agreements with us, in force since 2004, and international law. Moreover, the Government’s conduct is particularly oppressive and cynical,” DP World added.
“We demand that the Government ceases its unlawful conduct and continue to work as partners with us in the same spirit of cooperation that has been in place for the last 18 years, which has yielded hundreds of millions of dollars of direct and indirect benefits to Djibouti and enhanced its attractiveness as a leading investment destination in East Africa.”
The terminal operator said that the dispute would not have any material financial impact on the group.
DP World holds a 33 pct equity stake in the port of Doraleh, Djibouti, which has a capacity of 1.25 million TEU.
World Maritime News Staff