DP World's Djibouti Concession Case to be Heard in Hong Kong Courts

DP World has won the latest in a string of court rulings, as it defends its rights as shareholder and concessionaire in Djibouti’s Doraleh Container Terminal.

The Court of Appeal of Hong Kong has dismissed the latest request by China Merchants Port Holdings seeking permission to file a second appeal before the Court of Final Appeal, against its previous decision that DP World’s suit against the company should be heard before Hong Kong Courts, and not the courts of Djibouti.

DP World and joint venture company Doraleh Container Terminal are bringing multi-billion dollar claims against China Merchants alleging that it induced the government of Djibouti to expel DP World from the country and hand over the Doraleh terminal to China Merchants. 

China Merchants investments in other ports and free zone projects in Djibouti, in breach of DP World’s exclusivity rights, will also be examined.

China Merchants surprisingly argued that the case should be heard by the Djibouti courts, despite Hong Kong being its home jurisdiction. The High Court of Hong Kong agreed with DP World’s arguments that the case should proceed in Hong Kong and ordered China Merchants to pay its legal costs.

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The Court of Appeal dismissed an appeal against that decision, and has now refused to grant China Merchants permission to file a second appeal before the Court of Final Appeal.

The Hong Kong court ruling follows a ruling in January 2022, by the London Court of International Arbitration (LCIA) against the Republic of Djibouti, awarding interim damages of $200 million for damages caused over the period between for the period 23 February 2018 to 31 December 2020.

That was the eighth decision by an international court or tribunal in favour of DP World in its ongoing dispute with the Republic of Djibouti, and total damages due to DP World now amount to $686.5 million, plus accruing interest, while the Concession itself remains legally in force.

The Doraleh Container Terminal is the largest employer and biggest source of revenue in Djibouti and has operated at a profit every year since it opened.

DP World is a leading provider of worldwide smart end-to-end supply chain logistics, enabling the flow of trade across the globe.

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