DP World has won a further legal hearing against the Government of Djibouti over the Doraleh Container Terminal. A Tribunal of the London Court of International Arbitration 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.
An independent expert has estimated the losses to DP World at more than US$ 1 billion. The ruling by the Tribunal said Djibouti had acted illegally when it forcibly removed DP World from management of the terminal in February 2018, and claimed it had terminated the Concession Agreement and transferred the terminal’s assets to a state-owned entity.
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 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. The terminal was found by the English court to have been a “great success” for Djibouti under DP World’s management.
DP World now awaits proposals from Djibouti about how it intends to respect the latest legal ruling. If Djibouti does not comply with its findings, the Tribunal has stated it will proceed to issue an award of damages.