After the London Court of International Arbitration (LCIA) ruled that Djibouti had committed an illegal act in reclaiming the Doraleh Container Terminal (DCT) from the Dubai-based logistics behemoth in 2018, the long-running legal dispute between the government of Djibouti and international port operator DP World has taken a new turn.
The African country still owes DP World hundreds of millions of dollars in damages, but the tribunal’s final decision confirms that the company’s 50-year concession agreement for the port is still enforceable.
Although one arbitration case involving Djibouti’s state-owned Port de Djibouti SA (PDSA) has been resolved by the LCIA verdict, the conflict is far from resolved. The court dismissed Djibouti’s argument that it had the authority to end the concession, ruling that the 2018 seizure of DCT was illegal. However, it decided that the government, not its corporate arm, was solely responsible for the harm and refused to grant damages against PDSA.
DP World’s larger $1 billion claims against the Djiboutian government and its Chinese partner, China Merchants Port Holdings, are still pending as a result. Jointly developed by DP World and PDSA, the Doraleh Container Terminal is situated on the Red Sea coast close to one of the busiest shipping routes in the world. A concession was signed in 2006 to manage and run the facility for 50 years.
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