Djibouti illegally seized control of the Doraleh Container Terminal from a Dubai Ports World-owned entity that designed, built and has operated the terminal pursuant to a concession awarded in 2006.
The terminal, the largest employer and biggest source of revenue for Djibouti, has been operating on profit. The terminal’s seizure is the culmination of Djibouti’s campaign to force the DP World to renegotiate the terms of concession. Those terms were found to be “fair and reasonable” by a London Court of International Arbitration Tribunal.
DP World has commenced arbitration proceedings before the London court to protect its rights, or secure damages and compensation for their breach or expropriation.
Since December, Djibouti has sought to enforce the law against the concession contract entered into between DP World and Doraleh Container Terminal and the government, related to the container terminal. This culminated in a final demand that the contract be renegotiated by February 21, and the termination of that contract by Presidential Decree on Thursday and expropriation of all of its assets.
“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,” a DP World statement said. “To protect our interests, we have been compelled to commence a new arbitration against the Government in London, seeking a declaration that the contracts are valid and binding on the Government and to obtain urgent interim relief.”
“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."