The London Court of International Arbitration (LCIA) has ruled that Djibouti’s 2018 seizure of the Doraleh Container Terminal (DCT) was unlawful.
LCIA issued its final ruling in the case between DP World and Djibouti’s government-owned Port de Djibouti SA (PDSA) this week. The tribunal found that the government of Djibouti, not PDSA, was liable for the breach, therefore declined to award damages against PDSA.
However, DP World’s claims worth around USD1 billion against the government and its partner China Merchants Port Holdings remain active.
DP World said that its existing arbitration awards of approximately USD685 million against the government of Djibouti also remains valid and enforceable. The port operator said that the government has so far refused to honour these binding awards.
LCIA also confirmed that DP World’s 50-year concession agreement for Doraleh is legally valid and still binding, and the attempt to terminate it is unlawful.
PDSA was awarded costs in this specific proceeding. However, earlier rulings by the LCIA found PDSA’s attempt to terminate DP World’s 2006 joint venture agreement for DCT were unlawful. The net effect is that PDSA still owes DP World a substantial sum.
DP World said this ruling brings the LCIA arbitration proceedings to a close but does not end the company’s wider dispute. DP World said it would pursue all available legal avenues to secure fair compensation and enforce its rights against the government of Djibouti and China Merchants.
DP World also rejected claims made by Djibouti’s leadership in response to the ruling. ”Djibouti’s claims are at odds with reality, proven time and again in independent international tribunals. It is extraordinary that the government continues to spread a false narrative despite overwhelming evidence. This undermines investor confidence, damages Djibouti’s reputation, and ultimately hurts its people,” said a DP World spokesperson.
“DP World has successfully invested billions across Africa and globally, creating jobs, infrastructure and growth. But this case is bigger than DP World — it is about whether governments can tear up binding contracts and ignore international law without consequence. Djibouti’s behaviour is a clear warning to serious investors,” the spokesperson added.
