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Legal tussle over Dolareh Port escalates as DP World demands Djibouti to respect Concession Agreement

7 December 2020


By Godfreh Ivudria

The legal dispute between Dubai-based port operator and supply chain company DP World and the Djibouti government has gone a notch higher with DP World stating  it remains the legal operator and concession holder of the Dolareh Container Terminal in Djibouti.

In a statement, DP World said court rulings in the United Kingdom ordered Djibouti to restore the rights and benefits under the 2006 Concession agreement within two months or pay damages.

“DP World reiterates that the Djiboutian government should abide by the many court rulings and restore our full rights under the concession agreement of 2006,” DP World said in a statement.

DP World was responding to comments by Djibouti President Ismaïl Omar Guelleh who during an interview said DP World has been offered monetary compensation, but refused it.

During the interview, Guelleh, when asked the status of the commercial dispute between Djibouti and DP World said: “These people who stubbornly refuse to sit down and have a discussion with us aren’t interested in money. They’re too rich for that. What they want is for their old monopoly status to be fully reinstated. Their attitude stems from a desire to wield geopolitical control over all the region’s ports. But Djibouti isn’t just another square on a chessboard: we will not go back to the way things were.”

The dispute relates to the Doraleh Container Terminal SA (DCT), a Djibouti port operator owned 33.34 per cent by DP World Group and 66.66 per cent by state-owned Port de Djibouti.

The concession was awarded by the Djibouti government in 2006 but was cancelled in February 2018 by the government citing failure to resolve a dispute that began in 2012.

In November 2017, Djibouti passed legislation allowing it to renegotiate contracts related to strategic infrastructure. In February 2018, on the order of president Guelleh the Djibouti government seized the facility and placed it under the control of the government-owned Doraleh Container Terminal Management Company.

After seizing the port from DP World, Djibouti government sold China Merchants Ports Holdings a quarter of the port’s stake.

The government stated that the DP World contract violated Djibouti’s sovereignty. In response, DP world began a new arbitration case in London against the termination of their 30 year contract to manage the port to secure “compensation for their breach or expropriation.” The Djibouti government stated it would engage in “normal compensation procedures” to pay for the nationalization.

Six substantive rulings have been made in DP World’s favour by tribunals at the London Court of International Arbitration and the High Court of England and Wales. The rulings ordered Djibouti to restore the rights and benefits under the 2006 concession agreement to DP World and Doraleh Container Terminal within two months, or pay damages.

“DP World reiterates that the Djiboutian government should abide by the many court rulings and restore our full rights under the concession agreement of 2006. The implication in President Guelleh’s statement that DP World has been offered monetary compensation, but refused it, is untrue. The government has not offered DP World any compensation for this illegal expropriation of its investment,” DP World said.

“The comments made by President Guelleh shows a consistent trend in spreading rumours and false information, whilst completely disregarding international law. Despite the many assertions the President has made, no contact with DP World has ever been made by the Djiboutian authorities, nor has the government complied with any of the many prior judgments against it, including one in which the government was ordered to pay $485m to Doraleh Container Terminal for breaching its rights to exclusivity.”

Guelleh has maintained that court proceedings are still under way in London.

Source: EABW News








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