DP World Wins Court Ruling Over Djibouti Port Terminal Seizure

World
ByFORBES
DP World is planning a major logisitics hub in Ethiopia. Charles Crowell / Bloomberg

Following Djibouti’s seizure of a port container terminal operated by DP World earlier this year, the London Court of International Arbitration (LCIA) has now ruled that the Dubai-based port operator’s contract was “valid and binding.” The ruling from the LCIA was reported by Dubai’s government, and confirmed by the company in a social media post.

The government of Djibouti seized control of the Doraleh Container Terminal from DP World in February, and forced its employees to leave the country, a move the company called illegal. DP World had both built and operated the terminal, for which it won a concession in 2006, but reported that Djibouti’s government had sought to renegotiate the terms of the contract. The concession terms were reportedly found to be “fair and reasonable” in 2017 by another LCIA tribunal. 

Following the seizure, DP World proceeded to commence legal action in order to protect its rights or to secure damages and compensation. That has now resulted in a favorable ruling from the LCIA, with the decrees used by Djibouti to justify the seizure “found to be ineffective in law,” according to Dubai’s government media office. 

“DP World will now reflect on the ruling and review its options,” reads a statement from Dubai’s government.

DP World’s dispute with Djibouti comes as the company is expanding its footprint in East Africa. The company recently revealed plans to set up a logistics facility in landlocked Ethiopia, a move that comes as the company is developing a port in neighboring Somaliland.