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Home News DP World wins another battle against Djibouti government over DCT seizure

DP World wins another battle against Djibouti government over DCT seizure

The High Court of Englands & Wales on 13 July declared a major verdict in favor of the global port operator DP World declaring the seizure of Doraleh Container Terminal (DCT) by the government of the African nation of Djibouti three years ago as unlawful.

This verdict is the seventh win for the DP world in a series of long-drawn legal battles with the Djibouti government and its seaport corporation namely Ports de Djibouti SA (PDSA). The verdict has also directed PDSA to compensate DP World with legal costs worth US$2.3 million.

The current row erupted after PDSA single-handedly took over the control of DCT in 2018, which was originally built and operated jointly by both parties in 2006 under the JV agreement. Djibouti government in 2018 firstly terminated contracts of DP World nominated directors in the JV company under various pretenses. After which it unilaterally terminated the JV agreement without any compensation to DP World.

A similar verdict against illegal practices of Djibouti government was passed by an arbitration panel last year. The panel held PDSA guilty of violating the exclusivity agreement over DCT with DP World after it built another container terminal in close proximity along with a Chinese operator. The judgement directed PDSA to pay US$485 million as compensation to DP World, which is still due.

In anticipation of verdict of similar nature in DCT ownership row, the Djibouti government has already set up another rival facility in Somaliland backed by the government of Ethiopia to target the same Ethiopian cargo targeted by DCT aiming to get an edge over DP World.

The case will now shortly move to an arbitration panel which shall lay out a monetary sum to be paid by PDSA to DP World as compensation against the financial damages caused over the past three years.

Ankur Kundu

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