London Court confirms DjiboutI acted illegally in seizing DP World-built terminal

The London Court of International Arbitration (LCIA) has issued its final ruling in the case between DP World and Djibouti’s government-owned Port de Djibouti SA (PDSA).

The Tribunal confirmed that Djibouti’s 2018 seizure of the Doraleh Container Terminal (DCT) was unlawful. Although the Tribunal declined to award damages against PDSA on the basis that the harm was caused by the Government of Djibouti, not PDSA, DP World’s claims worth around $1 billion against the government and its partner China Merchants Port Holding remain active. 

DP World’s existing arbitration awards of approximately $685 million against the government of Djibouti also remain valid and enforceable. The Government has so far refused to honour these binding awards, a clear act of contempt for the rule of law and international business standards. 

The LCIA also confirmed that DP World’s 50-year concession agreement for Doraleh is legally valid and still binding, and the attempt to terminate it is unlawful. Yet, the Government continues to block DP World from exercising its rights at the terminal. 

PDSA was awarded costs in this specific proceeding. However, earlier rulings by the LCIA found PDSA’s attempt to terminate DP World’s 2006 Joint Venture Agreement for DCT were unlawful. The net effect is that PDSA still owes DP World a substantial sum. 

This ruling brings the LCIA arbitration proceedings to a close but does not end DP World’s wider dispute. DP World says it will pursue all available legal avenues to secure fair compensation and enforce its rights against the Government of Djibouti and China Merchants.