dp world and djibouti

Djibouti Rejects Court Ruling Over Doraleh Terminal, Agrees To Pay Fair Compensation

Djibouti has rejected a London Court of International Arbitration ruling that has ordered the country restore the rights of DP World to administer Doraleh Container Terminal.

The court has ordered Djibouti to restore the rights and benefits under the 2006 concession agreement to DP World and Doraleh Container Terminal within two months, or pay damages.

The latest tribunal ruling is the sixth ruling in DP World’s favor in the London Court of International Arbitration and the High Court of England and Wales. To date, all have been ignored by Djibouti despite the original contract for the concession being written under and governed by English law.

Rejecting the latest ruling of the London court over the Doraleh Container Terminal, Djibouti government has only agreed to pay a fair compensation, mentioning that it has terminated a contract with DP World for the higher interest.

“Under no circumstances can the Republic of Djibouti accepts such ruling, which was handed down in an arbitration in which it did not take part and which flouts the rules of international law,” said President Office of Djibouti,” in a communique issued on January 14, 2020. “These rules allow a sovereign state to terminate any contract for reasons of higher national interest subject to the payment of fair compensation.”

Djibouti government also explained that DP World’s operation of the terminal had proved to be contrary to the fundamental interests of the nation. Allowing this to continue would have seriously harmed the country’s economic and social priorities by unacceptable restrictions on its development policy, it added.

To solve its disputes with DP World, Djibouti government proposed allocation of fair compensation in accordance with international law as the only possible solution.  DP World, which built the port and ran it for more than a decade from 2006, estimates its losses at over one billion dollars. But Djibouti alleges both poor performance and irregularities in the original agreement in justifying its stance.

Samson Berhane

Editor-in-Chief samson.b@ethiopianbusinessreview.net

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