An Arbitral Tribunal of the London Court of International Arbitration (LCIA) has found that the Government of Djibouti’s action of seizing control of the Doraleh Container Terminal from DP World was illegal, DP World informed.
The LCIA Tribunal has ruled that Doraleh Container Terminal’s Concession Agreement “remains valid and binding notwithstanding Law 202 and the 2018 Decrees.”
Law 202 and the referenced decrees were devices enacted by Djibouti to seek to evade Djibouti’s contractual obligations, and these have been found to be ineffective in law, according to a statement released by DP World.
“DP World will now reflect on the ruling and review its options,” the port operator added.
On 22 February 2018, the Government of Djibouti seized control of the Doraleh Container Terminal from DP World, who designed, built and operated the terminal following a concession awarded in 2006.
Djibouti has insisted so far that the contract termination was done via a transparent legal process, highlighting that DP World lost all rights to the concession contract.
The government claimed that the decision was made after failed attempts to renegotiate the concession terms and that it is grounded on the general interest of the country’s citizens.
Namely, the country was not satisfied with the revenues from the operation of the terminal, adding that its poor performance was hampering the economic development and growth of Djibouti.
Following the termination, DP World launched a new arbitration in February 2018 seeking a declaration that the concession was valid and binding on the government.