Doraleh Terminal: London court rules against Djibouti, awards $385m to DP World

DP World kicks against termination of concession agreement by Djibouti  

PHOTO CREDIT: SHIPS & PORTS archive

The London Court of International Arbitration has ordered Djibouti to $385 million as compensation to Dubai based port and terminal operator DP World Djibouti unit over a breach of contract.

According to a statement by the Dubai government on Thursday, the court
also ordered Djibouti to pay interest for unilaterally scrapping a 50-year concession contract with DP World to manage and develop Doraleh Container Terminal (DCT).

This is the fifth substantial ruling in DCT and DP World’s favour on disputes relating to the Doraleh terminal.

The court established that by developing new container port opportunities with China Merchants Holdings International, a Hong-Kong based port operator, the East African country had breached DCT’s rights under the 2006 Concession Agreement to develop a container terminal at Doraleh.

Djibouti in February last year, terminated the concession of the container terminal which had been given in 2006 to DCT, a company 33.34 percent controlled by DP World and 66.66 percent by Port de Djibouti.

The terminal is an essential facility for supplies to neighbouring landlocked Ethiopia.

The ruling gave state-run DP World the right to claim further possible damages if Djibouti goes ahead with plans to develop the container port with any other operator.

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