DP World vows to defend its rights in Djibouti port row

The entrance gate of Doraleh Multi-Purpose Port in Djibouti.

Global ports operator DP World said on Tuesday that it would continue to pursue all legal means to defend its rights in a raging dispute with the government of Djibouti, which had seized a marine terminal operated by the Dubai-based company earlier this year.
DP World, a shareholder and concessionaire in Doraleh Container Terminal (DCT), described Djibouti's decision on Sunday to nationalise the port as "a blatant disregard for the rule of law and respect for commercial contracts."
The Dubai firm said it has won three rulings from Britain-based courts over the matter, most recently an injunction at the High Court in London on August 31.
Nationalising Doraleh amounted to "an attempt to flout an injunction of the English High Court," which barred Djibouti authorities from taking control over the facility, DP World said in a statement.
The concession agreement between DP World and Djibouti, signed in 2006, is governed by English law and through the London Court of International Arbitration, the port operator said. The Djibouti government, which had a two-thirds stake in the terminal, cancelled the contract with DP World in late February, saying its national sovereignty was being compromised.
Currently, Hong Kong-based China Merchants Port Holdings Company owns a 23.5-per cent stake in the facility.
Djibouti on Monday accused DP World, which operates 78 terminals in 40 countries, of waging a judicial and media war.
"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.
On August 31, the High Court of England & Wales issued an injunction restraining Djibouti's Port de Djibouti (PDSA), as shareholder in DCT, from treating its joint venture shareholders' agreement with DP World as terminated. PDSA is owned in majority by the government of Djibouti.
The UK court has further prohibited PDSA from removing directors of the DCT joint venture company.
The court has ordered PDSA not to interfere with the management of DCT until further orders of the court or the resolution of the dispute by a London-seated arbitration tribunal.
Last month's injunction, the third legal ruling in favour of DP World, was in the wake of a move by PDSA to call of an extraordinary shareholders' meeting on September 9 to replace DP World appointed directors of the DCT joint venture company.
The court ruling recognised that although PDSA is the majority shareholder of the DCT, it is DP World that has management control of the company, in accordance with the parties' legally binding contracts.
DP World said the court ruling made clear that PDSA cannot act as if the joint venture agreement with DP World has been terminated and also it cannot appoint new directors or remove DP World's nominated directors without its consent.
-   issacjohn@khaleejtimes.com
 
 

• Infrastructure

Issac John

issacjohn@khaleejtimes.com