DP World to fight on against Djibouti's Red Sea terminal share purchase
Caption: DP World has pursued the challenge in court, winning six times in the London Court of International Arbitration.
What you need to know:
- The declaration follows Djibouti government's announcement of its intention to nationalize all shares owned by the Port of Djibouti, S.A (PDSA) in the DCT in the Red Sea.
- DP World has maintained that Djibouti's acquisition of shares was proscribed under the High Court's decision.
Dubai-based logistics company DP World has declared its unwavering commitment to pursue all available legal avenues in its dispute concerning the Doraleh Container Terminal (DCT), decrying what it perceives as Djibouti's blatant flouting of legal principles.
Government of Dubai
The company said this on March 19, in a statement issued by the government of Dubai.
The declaration follows Djibouti government's announcement on September 10th of its intention to nationalize all shares owned by the Port of Djibouti, S.A (PDSA) in the DCT in the Red Sea.
Djibouti's action comes on the heels of England’s High Court's affirmation of the London Court of International Arbitration's (LCIA) ruling, which deemed the Djibouti-DP World concession agreement for the DCT legally enforceable.
The takeover of the DCT by Djibouti occurred in February 2018, a move justified by Djibouti authorities who argued that the concession agreement unfairly favored DP World.
Latest salvo
DP World has maintained that Djibouti's acquisition of shares was proscribed under the High Court's decision, characterising it as the latest salvo in the Government of Djibouti’s five-year crusade to wrest control of the 2006 Concession Agreement from DCT.
The company’s statement reads: “Investors across the world must think twice about investing in Djibouti and reassess any agreements they may have with a government that has no respect for legal agreements and changes them at will without agreement or consent. In an apparent attempt to circumvent the injunction, on 9 September 2018, the Government of Djibouti transferred PDSA’s shares in DCT to itself.”
DP World said the recent decree was coupled with a press release containing numerous false assertions. “It also refers to DP World being paid fair compensation by international law.”
2006 Concession Agreement
Under the terms of the 2006 Concession Agreement, which falls under English jurisdiction, any disputes arising from the agreement are to be settled through compulsory arbitration in the London Court of International Arbitration. “Such arbitration proceedings are ongoing. To date the Government has not made any offer to compensate DP World,” the company stated.
