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DP World on Tuesday said
it would 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 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 Doraleh
Container Terminal SA (DCT) to the Government of Djibouti. PDSA is 23.5%
owned by China Merchants Port Holdings Company Ltd of Hong Kong (“China
Merchants”).
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
Doraleh Container Terminal.
“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 31 August, 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.
In
an apparent attempt to circumvent the injunction, on 9 September 2018, the
Government of Djibouti transferred PDSA’s shares in DCT to itself. The new decree was accompanied by a press release
replete with untrue statements. It also refers to DP World being paid fair
compensation in accordance with international law.
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. To date the Government has not made any
offer to compensate DP World.
By APO Group on behalf of Government of Dubai.
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