Dubai-based port and terminal operator DP World has won a further legal hearing against the Government of Djibouti over the Doraleh Container Terminal.
The London Court of International Arbitration (LCIA) has ordered Djibouti to restore the rights and benefits under the 2006 concession agreement to DP World and Doraleh Container Terminal SA within two months, or pay damages, the port operator said in a statement.
The latest tribunal order is the sixth substantive ruling in DP World’s favor at LCIA and the High Court of England and Wales. To date, all rulings have been ignored by Djibouti despite the original contract for the concession being written under and governed by English law.
The ruling by the tribunal said Djibouti had acted illegally when it forcibly removed DP World from the management of the terminal in February 2018, claimed it had terminated the concession agreement and transferred the terminal assets to a state-owned entity.
An independent expert has estimated the losses to DP World at more than USD 1 billion.
“DP World now awaits proposals from Djibouti about how it intends to comply with the latest legal ruling. If Djibouti does not comply with the ruling, the tribunal has stated it will proceed to issue an award of damages,” the port operator added.
Under the concession awarded in 2006, DP World built the container terminal on the east coast of Africa which has an annual capacity of 1.2 million TEU. The facility’s 18-meter draft and 1050-meter quay handle the largest ships in service, including 10-15,000 TEU “Super-Post-Panamax” vessels. Capacity at the terminal is set to grow in line with market demand to around 3 milion TEU over time.