DP World: We Will Defend Our Rights
DP World said on Tuesday that it will continue to pursue all legal means to defend its rights as a shareholder and concessionaire in Doraleh Container Terminal SA (DCT) in the face of what it calls Djibouti's “blatant disregard for the rule of law and respect for commercial contracts.”
On September 9 the President of Djibouti enacted a decree which purportedly transferred the shareholding of Port de Djibouti SA (PDSA) in DCT to the Government of Djibouti. PDSA is 23.5 percent owned by China Merchants Port Holdings Company of Hong Kong.
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.
“Investors across the world must think twice about investing in Djibouti and reassess any agreements they may have with a government that has no respect for legal agreements and changes them at will without agreement or consent,” a DP World spokesperson said.
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.