Arbitrator finds government attempted to evade contractual obligations.
An arbitrator on Thursday found the government of Djibouti improperly seized control of the Doraleh Container Terminal from DP World earlier this year, according to a press release from the government of Dubai.
DP World designed, built and had operated the terminal since 2006 under a concession awarded by Djibouti. It had a 33 percent equity stake in the terminal.
In February Djibouti seized the terminal under Law 202, which the press release said “purports to empower the government to terminate its infrastructure agreements.” It said the law and accompanying decrees were “devices … to evade Djibouti’s contractual obligations.”
Dubai said the concession terms were found to be “fair and reasonable” in 2017 by a tribunal at the London Court of International Arbitration (LCIA).
After the terminal was seized in February, DP World commenced another arbitration at the LCIA, seeking a declaration that the concession agreement was valid and binding on Djibouti.
On Thursday, the government of Dubai said a “tribunal, comprised of Professor Zachary Douglas QC, has definitively confirmed that the concession agreement, which is governed by English law, remains binding and in force notwithstanding the government’s purported termination of it under Law 202.”
LCIA noted that “the international nature of LCIA’s services is reflected in the fact that, typically, over 80 percent of parties in pending LCIA cases are not of English nationality.”
DP World’s concession for the terminal “remains valid and binding notwithstanding Law 202 and the 2018 decrees,” said the government of Dubai.
It added that “DP World will now reflect on the ruling and review its options.”
Djibouti improperly seized container terminal
