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Port of Antwerp Must Pay $45M Compensation to DP World in Land Dispute

Port of Antwerp
The arbitration concerned the reallocation of land for container operations in the port (Port of Antwerp)

Published Feb 28, 2024 3:26 PM by The Maritime Executive

 

Belgium and the Port Authority for the Port of Antwerp-Bruges have been ordered by an international tribunal to pay substantial compensation to DP World in a long-running dispute over the assignment of land. While the International Center for Settlement of Investment Disputes (ICSID) previously ruled the port legally reappropriated the land in question, in the compensation round of the hearing they found the port had not adequately paid DP World and now must also cover costs and interest.

DP World had taken the case to arbitration in 2017 three years after the then Antwerp Port Authority reassigned unused land under a concession. DP World did not agree to reduce the size of its concession and has been seeking compensation for the reduction in its area of operations within the port.

The Antwerp Port Authority awarded a 42-year concession to DP World for the eastern portion of the then under development Deurganck dock. A partnership between Mediterranean Shipping Company (MSC) and Singapore’s PSA was awarded the western portion of the area which opened for commercial traffic in the fall of 2005. 

The concessions were later renegotiated when volumes fell in the port and then in 2014 with traffic booming in the port, the MSC-PSA partnership was looking to expand and consolidate its operations. The Port Authority used expropriation, or the repossession of an investment, reassigning a portion of unused land in the Deurganck area away from DP World and to the neighboring operation.

During the first phase of arbitration, ICSID ruled in 2021 on issues of jurisdiction and liability. At the time, they decided that on the basis of public interest, the port was justified in its actions to take back and reassign the land. They found the process followed was legal and not discriminatory. Saying it did not conflict with the concession, the finding said the port had the right to modify the concessions in the public interest.

The Antwerp Port Authority noted that it was a nuanced decision and continued to contest it. Both sides made final filings in June 2023 after the Arbitration Tribunal conducted a hearing on the issue of compensation.

The ruling was filed on February 15 finding that the now Port of Antwerp-Bruges was liable for €41.3 million ($44.67 million) in compensation to DP World for having reassigned the empty land that was within the original concession agreement. Further, they are being ordered to pay interest and costs which is expected to dramatically increase the total award.

The Port Authority in a statement said the decision provides “legal certainty,” while stressing its strong relationship and work with DP World. They reiterated their belief that the 2014 actions were in the public interest to “safeguard the port’s international traffic,” as well as promoting employment and supporting the community surrounding the port with economic development.