A court slaps Djibouti with $54 million annually for failing to pay DP World

Doraleh port has three berths and an annual capacity of 1.2 million 20-foot equivalent units of container traffic. (Shutterstock)

LONDON - A tribunal court on matters administration in London has slapped awarded DP World $200,752, 000 and its joint venture company Doraleh Container Terminal as damages for being excluded from the terminal in Djibouti.

According to the tribunal, the damages cover the period from February 2018 to December 2020.

The damages cover the period from February 18, 2018, to December 31, 2020. According to the AllAfrica news website, DP World’s rights, under a 2006 concession agreement, to operate the terminal remain valid and binding, leaving the door open to DP World being reinstated, the Africa AllStar reports.

According to the publication, the damages were triggered by the illegal seizure of the Doraleh Container Terminal by the Djiboutian government in 2018, precipitating the loss of millions of dollars by the DP World, a freight company based in Dubai.

Evidence shows that this is yet another in a string of several rulings from the LCIA and the High Court of England and Wales over the last four years, all in DP World’s favor. To date, all have been ignored by Djibouti despite the concession remaining valid and in force, under English law.

With the effect of this latest ruling that Djibouti’s illegal actions are accruing liability for damages in excess of USD 54 million per year, DP World remains optimistic that Djibouti will see the light and recognize that it must respect its legal obligations.

DP World and Doraleh Container Terminal are bringing multi-billion dollar claims against China Merchants alleging that it induced the government of Djibouti to expel DP World from the country and hand over the Doraleh terminal to China Merchants.

China Merchants surprisingly argued that the case should be heard by the Djibouti courts, notwithstanding that Hong Kong is its home jurisdiction.

The Hong Kong Court of Appeal agreed with DP World’s arguments that the case should proceed in Hong Kong and ordered China Merchants to pay its legal costs. Having sought to delay the proceedings for nearly three years, China Merchants must now file its defense by 11 February 2022.

The Port of Djibouti is used as the main entrance to the Horn of Africa and serves to the larger extent landlocked Ethiopia. For years, Ethiopia has been using the port for importation and exportation, thus remitting billions of dollars in terms of foreign exchange to Djibouti.

In the recent past, the Port of Berbera in Somaliland has been fronted to take over in the Horn of Africa leading to strong competition. A road network is also being done connecting Ethiopia and Somaliland for future partnership.

GAROWE ONLINE