DP World ‘to pursue all legal means’ to defend rights in Doraleh Container Terminal

The company said it would do this “in the face of Djibouti's blatant disregard for the rule of law and respect for commercial contracts.”
Doraleh Container Terminal.
Doraleh Container Terminal.

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DP World will continue to pursue all legal means to defend its rights as a shareholder and concessionaire in Doraleh Container Terminal SA (DCT), the port operator said in a press release Tuesday.

The company said it would do this “in the face of Djibouti's blatant disregard for the rule of law and respect for commercial contracts.”

The communique came after the President of Djibouti on September 9th, enacted a decree which purportedly transferred the shareholding of Port de Djibouti SA (PDSA) in Doraleh Container Terminal SA (DCT) to the Government of Djibouti.

PDSA is 23.5% owned by China Merchants Port Holdings Company Ltd of Hong Kong (“China Merchants”).

DP World said the transfer appears to have been made in an attempt to flout an injunction of the English High Court, which restrains PDSA from using its shareholding to take control of DCT.

This is the latest step in the Government of Djibouti’s five-year campaign to take the 2006 Concession Agreement away from DCT, through which DP World operated, and part owns the Doraleh Container Terminal.

“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,” a DP World spokesperson said. 

The 2006 Concession Agreement, which is governed by English law, provides that disputes relating to the Agreement are to be resolved through binding 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 port operator said in a release.