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DP World wins ruling against Djibouti over a port snatched from underneath them

PortandTerminal.com, January 15, 2020

In February 2018 Djibouti ended its 50-year concession agreement with DP when it seized the terminal after claiming sovereignty violations against the Dubai-based port operator.

LONDON – DP World said Tuesday it has won another arbitration ruling against Djibouti over the African country’s seizure of a container terminal managed by the Dubai-based global port operator.

READ: Djibouti – “A complete disregard for the Rule of Law,” says DP World

The company said a London tribunal ordered Djibouti to restore its rights and benefits under a 2006 concession agreement governing the Doraleh port within two months or pay damages. DP World estimates it has lost $1 billion since Djibouti took over the terminal in February 2018.

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, claiming it had terminated the Concession Agreement and transferred the Terminal assets to a state-owned entity,” the verdict stated.

The latest tribunal ruling is the sixth substantive ruling in DP World’s favour in the London Court of International Arbitration and the High Court of England and Wales.

To date, all rulings in DP’s favor have been ignored by Djibouti despite the original contract for the concession being written under and governed by English law.

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

DP World now awaits a proposal 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.

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