High Court Rules Djibouti Must Accept Judgement


The High Court of England & Wales has granted an injunction preventing Djibouti's official port company, Port de Djibouti S.A. (PDSA), from treating its agreement with global trade enabler DP World as terminated.

The High Court has further prohibited PDSA from removing directors of the Doraleh Container Terminal (DCT) joint venture company who were appointed by DP World as part of the original 50-year concession agreement, which Djibouti withdrew from in February 2018.

As part of the judgement, the PDSA is not to interfere with the management of DCT until further orders of the court or the resolution of the dispute by a London-seated arbitration tribunal.

The ruling follows two previous decisions by the London Court of International Arbitration (LCIA) in regard to the DCT concession agreement. 

It also comes just four days before the PDSA is due to hold an extraordinary shareholders' meeting to replace DP World appointed directors.

Read more about DP World's plans with a Port Technology technical paper

The new ruling against PDSA, issued by the Court without PDSA’s participation, makes clear that PDSA:

  • Cannot act as if the joint venture agreement with DP World has been terminated
  • Cannot appoint new directors or remove DP World’s nominated directors without its consent
  • Cannot cause the DCT joint venture company to act on the “Reserved Matters” without DP World’s consent
  • Cannot instruct or cause DCT to give instructions to Standard Chartered Bank in London to transfer funds to Djibouti

It also recognises that although PDSA is the majority shareholder of the DCT joint venture company, it is DP World that has management control of the company, in accordance with the parties’ legally binding contracts.

If PDSA disobeys the Court’s order and seeks to replace DP World nominated directors of DCT on 9 September, it may be in contempt of court and face a fine or the seizure of its assets and its officers and directors may be imprisoned.

The Court has ordered PDSA to present its defence at another hearing on 14 September.

Meanwhile, DP World is notifying Standard Chartered Bank so that the bank will reject any instructions that may be sent to them after the 9 September meeting. China Merchants, who have been given operational control of the Djibouti Freezone in breach of DP World’s exclusivity rights, will also be informed given its minority shareholding in PDSA.

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