DP World takes legal action as China makes Djibouti move

DP World hits back as China makes move to turn Djibouti into "the Dubai of Africa".
Dijibouti, China, Dp world, Dubai, Africa, Logistics


DP World has reiterated that its concession agreement for the Doraleh Container Terminal (DTC) in Djibouti remains in force, even as China moves in on the strategically-located microstate.

DP World warned in a statement that the government’s illegal seizure of the facility doesn’t give the right to any third party to violate the terms of the concession.

The statement was released following news reports on the opening of the first phase of the Chinese-built Djibouti International Free Trade Zone, in violation of DP World's exclusive management rights.

The Djibouti International Free Trade Zone (DIFTZ) is a planned 48 sq km project, however the first phase will be a US $370-million, 2.4 sq km pilot zone which will consist of four industrial clusters focusing on processing goods for export, financial support services, manufacturing and duty-free retailing.

“Having become a global logistics hub, today Djibouti is taking the next step to become an industrial and commercial hub. The opening of DIFTZ shows that Djibouti continues to grow its increasingly important role in world trade,” said Djibouti president Ismail Omar Guelleh, speaking at the launch of the project last week.

The zone will be managed by the Djibouti government and three Chinese companies: China Merchants Group, Dalian Port Authority and financial services provider IZP Technologies.

A DP World Spokesperson said: "This is yet another clear example by the Djiboutian Government of violating its contractual obligations and the rights of foreign investors.”

The spokesperson warned that DP World reserves the right to take all available legal actions, including claims for damages against any third parties that interfere or otherwise violate its contractual rights.

In February, the Government of Djibouti unlawfully seized control of the terminal, forced DP World employees to leave the country and purported to terminate the concession agreement.

DP World said it has commenced an arbitration against the Government of Djibouti before the London Court of International Arbitration and is awaiting the outcome of this process.

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