Logistics

DP World hits out at Djibouti after latest court victory

July 31, 2024, 2:57 PM

Dancers at the opening ceremony for the Doraleh container terminal in 2009. Relations between DP World and the Djibouti authorities have since soured — Dancers at the opening ceremony for the Doraleh terminal in 2009. Relations between DP World and the Djibouti authorities have since soured

Brands government ‘bad for business’
US court ruled in port group’s favour
Legal dispute began in 2018

DP World has described the government of Djibouti as “bad for business” and said companies should “think twice” about investing in the country, following the latest ruling in their long-running legal dispute.

A US court ruled in favour of the Dubai-based global ports operator this week in its battle over the Doraleh container terminal in the East African country.

The Doraleh terminal, which was built and operated by DP World, was seized by the government and “nationalised” in 2018. The Djibouti authorities claimed the concession agreement signed with DP World unfairly favoured the company.

This claim has been rejected by judges and arbitrators in the High Court in England and the London Court of International Arbitration.

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Now the US District Court for the District of Columbia has enforced an award of $200 million, which was issued by the arbitration court in 2022.

After the ruling in Washington, a spokesperson for DP World said: “The authorities in Djibouti have repeatedly shown an utter contempt for the rule of law and the norms of good business, with no respect for legal agreements.

“Their actions are a warning to investors across the world who should think twice about the safety of their existing business in Djibouti and the future value of any new investments.”

The spokesperson added: “Put simply, the Djibouti government is bad for business.”

AGBI has contacted the Djibouti embassy in the UAE for comment.

Damages already awarded to DP World for lost dividends, breaches of exclusivity and management fees linked to Doraleh amount to nearly $700 million, the company said.

In the event of an expropriation, DP World’s claim will exceed “a further $1 billion”, it added.

The 1.2 million TEU (twenty-foot equivalent unit) container terminal is one of the largest employers in Djibouti. DP World employs more than 27,000 people across 48 countries in Sub-Saharan Africa.