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Friday, July 13, 2018

DP World warns of legal action in Djibouti row Issac John /Dubai!

  • The global ports operator's warning came amid reports of the opening of the first phase of the Chinese-built International Free Trade Zone.
DP World, the Dubai-based global ports operator, on Thursday warned of legal action, saying Djibouti government's illegal seizure of Doraleh Container Terminal doesn't give the right to any third party to violate the terms of the concession agreement.DP World reiterated in a statement that since the concession agreement with the Djibouti government for the Doraleh terminal remains in force, no third party can violate its terms. The global ports operator's warning came amid reports of the opening of the first phase of the Chinese-built International Free Trade Zone, in violation of DP World's exclusive management rights of Doraleh terminal.

"DP World reserves the right to take all available legal actions, including claims for damages against any third parties that interfere or otherwise violate its contractual rights," the statement said. Doraleh terminal is an extension of the Port of Djibouti, located 5-km west of Djibouti City.

"This is yet another clear example by the Djiboutian Government of violating its contractual obligations and the rights of foreign investors," a DP World spokesperson said.

The spokesperson warned that DP World reserves the right to take all available legal actions, including claims for damages against any third parties that interfere or otherwise violate its contractual rights.

On 22 February 2018, the Djibouti government unlawfully seized control of the terminal from a DP World-owned entity that designed, built and had been operating the terminal pursuant to a concession awarded in 2006.

The seizure forced DP World employees to leave the country and purported to terminate the concession agreement.

Since then, DP World has commenced arbitration proceedings against the Djibouti government before the London Court of International Arbitration and is awaiting the outcome of this process.

The terminal, the largest employer and biggest source of revenue for Djibouti, has been operating on profit. The terminal's seizure is the culmination of Djibouti's campaign to force DP World to renegotiate the terms of concession, which were found to be "fair and reasonable" by the London Court of International Arbitration in February 2017.

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