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DP World slams Djibouti Port seizure, commences arbitration proceedings

DP World has strongly responded as it accused the Government of Djibouti of illegally seizing control of the Doraleh Container Terminal from its operating unit there.

“To protect our interests, we have been compelled to commence a new arbitration on February 20, 2018 against the Government in London, seeking a declaration that the contracts are valid and binding on the Government and to obtain urgent interim relief,” DP World said in a statement.

It further added: “We demand that the Government will cease its unlawful conduct and continue to work as partners with us in the same spirit of cooperation that has been in place for the last 18 years, which has yielded hundreds of millions of dollars of direct and indirect benefits to Djibouti and enhanced its attractiveness as a leading investment destination in East Africa.”

DP World designed and built the Doraleh Container Terminal and, since 2006, has been operating it under a concession awarded by the Djibouti government. DP World says the 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 global port operator claims the illegal seizure of its terminal in Djibouti is the culmination the government’s campaign to force the group to renegotiate the terms of the concession, which have already been found to be “fair and reasonable” by a London Court of International Arbitration tribunal in earlier arbitration proceedings.

DP World alleges that the Government of Djibouti has sought since December 2017 to enforce the law against the concession contract, alleging that the contracts were corrupt. This had now culminated in a final demand that the contract be renegotiated by February 21, and the eventual actual termination of the contract by Presidential Decree on February 22 and expropriation of all of the assets of Doraleh Container Terminal.

DP World has since commenced arbitration proceedings before the London Court of International Arbitration to protect their rights, or to secure damages and compensation for their breach or expropriation.

“We consider the law, the attempt of the Government to enforce its terms, the purported termination and expropriation to be in breach of the Government’s obligations under its agreements with us, in force since 2004, and international law.” DP World reiterated.

It added: “Moreover, the Government’s conduct is particularly oppressive and cynical. The Government only recently failed in its attempts to unravel the contracts by alleging the contracts were corrupt both before the High Court of England & Wales and before an arbitral Tribunal in London (comprising Sir Richard Aikens, Peter Leaver QC, Lord Hoffman), which dismissed the Government’s allegations that the contracts were unfair in their entirety.”

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