DP World: Dark Clouds are Gathering Over Djibouti
As part of its on-going dispute with the Government of Djibouti, DP World has now released a video arguing its case and saying “dark clouds are gathering over Djibouti.”
The video recounts DP World's history in the African nation, highlighting the benefits it has brought including a new container terminal which has supported significant economic growth for the nation - 14.5 percent each year since 2011, supporting 10 percent of annual government spending.
On September 9, the President of Djibouti enacted a decree which transferred the shareholding of Port de Djibouti SA (PDSA) in Doraleh Container Terminal (DCT) to the Government of Djibouti. PDSA is 23.5 percent owned by China Merchants Port Holdings Company of Hong Kong. The government said that the decision aimed to protect the fundamental interests of the nation of Djibouti and the legitimate interests of its partners in the face of what it called “severe irregularities.”
DP World said the transfer appears to have been made in an attempt to flout an injunction of the English High Court which restrains PDSA from using its shareholding to take control of DCT. This is the latest step in the Government of Djibouti’s five-year campaign to take the 2006 Concession Agreement away from DCT, through which DP World operated, and part owns the DCT.
On August 31, the High Court of England & Wales issued an injunction against PDSA, as shareholder in DCT, ordering that it:
• Shall not act as if the joint venture agreement with DP World has been terminated
• Shall not appoint new directors or remove DP World’s nominated directors without its consent
• Shall not cause the DCT joint venture company to act on the “Reserved Matters” without DP World’s consent.
• Shall not instruct or cause DCT to give instructions to Standard Chartered Bank in London to transfer funds to Djibouti.
The 2006 Concession Agreement, which is governed by English law, provides that disputes relating to the agreement are to be resolved through binding arbitration in the London Court of International Arbitration. Such arbitration proceedings are ongoing. DP World says that, to date, the Government has not made any offer to compensate it.
“Investors across the world think twice before investing in Djibouti,” says DP World.