Djibouti seizes DP World terminal

Angelo Anderson
February 25, 2018

Dubai has said it is seeking global arbitration against Djibouti after the Horn of Africa nation terminated its concession at a key port that is the main transit route to landlocked Ethiopia.

DP World signed a 30-year concession agreement to manage the Port of Berbera in May 2016.

Djibouti announced on Thursday that it is "unilaterally" terminating a large contract with Dubai's DP World over alleged "illegal" payments.

DP World said in a statement that the seizure of the terminal came after the government's campaign to force DP World to renegotiate the terms of its concession in the Horn of Africa.

"Since December 2017, the government of Djibouti has sought to enforce the law against the concession contract entered into between DP World and Doraleh Container Terminal SA and the government, related to the container terminal at Doraleh".

DP World helped Djibouti develop its trade for the past two decades and "recent arbitrary measures' harmful impact will be far worse for Djibouti" than DP World, Gargash wrote in another tweet.

Announcing the DCT nationalisation decision on Thursday, Djibouti's transport ministry said that it was merely implementing a law adopted in November past year that "sets a legal framework allowing for the renegotiation, if necessary, of contracts already concluded dealing with the management or exploitation of strategic infrastructure".

DP World has confirmed that the terminal has been seized, adding that it is also one of the biggest employers in the country.

China's base is immediately adjacent to the Doraleh terminal.

The latest move comes a year after a London Court of International Arbitration tribunal threw out the government's claims that the agreement was unfair, fully exonerating DP World and ordering the government to pay arbitration and other costs.

DP World claims it's Doraleh Container Terminal in Djibouti is the "best performing" on the east coast of Africa. The ports company revealed that it has started arbitration proceedings at the London Court of International Arbitration.

It purchased P&O Group of the United Kingdom in 2006 for £3.9bn ($7bn), which was at the time the world's fourth largest ports operator.

Other reports by Iphone Fresh

Discuss This Article