DP World Provides Warning Over Djibouti Terminal

DP World has given clear notice that the Concession Agreement to operate the Doraleh Container Terminal in Djibouti, which was awarded by the Government of Djibouti to Doraleh Container Terminal S.A., or DCT, a joint venture controlled by DP World, remains in full force and effect.

The Agreement conferred on DCT the right to operate the port, which it designed and built, and in turn DP World was mandated to manage the port.

The Agreement also gives DCT and DP World exclusive rights to build and operate any other container ports and free zones in Djibouti.

The Concession Agreement was recently upheld as a valid and binding contract under English law by a distinguished tribunal of arbitrators under the auspices of the London Court of International Arbitration, which rejected the Government of Djibouti’s attempt to rescind the Concession Agreement based on false allegations of corruption.

In a related proceeding an English High Court Justice agreed that the Concession Agreement had been a great financial success for Djibouti.

Nevertheless, on February 22, 2018, the Government of Djibouti unlawfully seized control of the Terminal, forced DP World employees to leave the country and purported to terminate the Concession Agreement.

The claimed termination is invalid under English law, and thus the Agreement remains in full force and effect.

DP World and DCT have commenced a new LCIA arbitration against the Government of Djibouti due to this unlawful seizure and purported termination.

There have been reports that the Government of Djibouti is contracting with other companies to build and operate other port facilities in Djibouti in violation of DP World and DCT's exclusivity rights.

In a statement, DP World stated: “Take notice that DP World and DCT are the lawful holders of rights in respect of the ownership and operation of the container shipping terminal at Doraleh, Djibouti.

Adding: [DP World] will pursue all available legal recourse, including claims for damages, against any other entities that interfere or otherwise violate their rights with respect to the Concession Agreement.”