London court rules Djibouti acted illegally in seizing DP World terminal

Dubai: The London Court of International Arbitration (LCIA) has confirmed that the Government of Djibouti acted unlawfully in seizing the Doraleh Container Terminal (DCT) from DP World in 2018.

The ruling marks the end of arbitration between DP World and Djibouti’s state-owned Port de Djibouti SA (PDSA), but does not conclude DP World’s broader legal battle. The tribunal dismissed claims for damages against PDSA, determining that the harm was caused directly by the Government of Djibouti.

However, DP World’s legal claims worth approximately $1 billion against the government and its partner China Merchants Port Holdings remain ongoing.

Separately, DP World holds binding arbitration awards valued at $685 million against the Djiboutian government—amounts that remain unpaid. The LCIA reaffirmed that DP World’s 50-year concession agreement for the Doraleh terminal, signed in 2006, remains valid and enforceable.

Despite this, the Government of Djibouti continues to block DP World from operating at the terminal.

Unlawful termination

While PDSA was awarded costs in this particular proceeding, previous LCIA rulings had found its efforts to terminate DP World’s joint venture agreement unlawful.

On balance, PDSA still owes DP World a substantial amount, and the LCIA confirmed that Djibouti’s termination of DP World’s concession was not legally valid.

“Djibouti’s claims are at odds with reality, proven time and again in independent international tribunals. The government’s actions harm investor confidence and the country’s reputation,” a DP World spokesperson said.

DP World also rejected recent statements by Djibouti officials, including President Ismail Omar Guelleh, calling them misleading and inconsistent with binding international rulings.

Timeline of dispute

• 2006: DP World signs a 50-year concession to operate Doraleh Container Terminal.

• 2013: Djibouti sells 23.5% of DCT to China Merchants, which later opens a competing port.

• 2018: Government forcibly takes over DCT and expels DP World staff.

• 2018–2025: Multiple tribunals rule in DP World’s favour; government refuses to comply.

DCT was one of Djibouti’s largest infrastructure projects, employing thousands and contributing around 12% to the country’s GDP during DP World’s management.

DP World says it will continue pursuing all legal avenues to enforce its rights and recover the funds it is owed.