The London Court of International Arbitration (LCIA) has ruled that DP World’s concession agreement over the Doraleh Container Terminal is valid and legally binding, rendering the Djiboutian government’s seizure of it illegal.
Djibouti took control of the terminal on 23 February 2018, claiming Dubai-based DP World wasn’t utilising its full capacity.
It then signed the China-backed Djibouti International Free Trade Zone (DIFTZ) in July 2018, the biggest free trade zone in Africa, which DP World claimed violated the 50-year concession agreement.
The LCIA Tribunal has ruled that Doraleh Container Terminal’s Concession Agreement “remains valid and binding notwithstanding Law 202 and the 2018 Decrees”.
— DP World (@DP_World) August 2, 2018
In a statement, the UAE government said: “On 23rd February 2018, the Government of Djibouti illegally seized control of the Doraleh Container Terminal from DP World, who designed, built and operated the terminal following a concession awarded in 2006.
“The terminal is the largest employer and biggest source of revenue in the country, has operated at a profit every year since it opened, and has been found to have been a great success for Djibouti under DP World’s management.
“The LCIA Tribunal has ruled that Doraleh Container Terminal’s Concession Agreement ‘remains valid and binding notwithstanding Law No. 202 and the 2018 Decrees’. Law No. 202 and the referenced decrees were devices enacted by Djibouti to seek to evade its contractual obligations, and these have been found to be ineffective in law.”
“DP World will now reflect on the ruling and review its options.”