Dubai (AFP) – Dubai’s government said Thursday its port operator DP World has won a London court battle against Djibouti after the Horn of Africa nation cancelled a terminal contract.
The London Court of International Arbitration “confirmed the illegitimacy of the government of Djibouti’s action of seizing control of the Doraleh container terminal from DP World,” the emirate’s media office said in a statement.
It also ruled that a 50-year concession agreement between Djibouti and DP World to run the Doraleh container terminal “remains valid and binding”.
The government of Djibouti did not immediately confirm the ruling, which stems from a complaint in February when Dubai accused the country of “illegally” seizing control of the Doraleh terminal.
DP World designed, built and operated the terminal in line with the concession agreement, and had run it since 2006.
But the deal turned sour with Djibouti accusing DP World of under-managing the container terminal in favour of the company’s main port in Dubai, as well as allegedly blocking expansion and key decisions.
Dubai said the company would “reflect on the ruling and review its options” following the London court decision.
DP World operates 78 ports in more than 40 countries and in recent years has expanded its profile in the Horn of Africa.
In September 2016 the company announced it had won a 30-year concession to manage a port at Berbera in the breakaway republic of Somaliland.
On March 1, DP World, Ethiopia and Somaliland struck a deal giving Ethiopia a 19-percent stake in the Berbera port. The company holds a 51-percent stake, while Somaliland has the remaining 30 percent.
Djibouti has been on an infrastructure blitz in recent years, aiming to cash in on its location on the strategic Bab el-Mandab strait, the key shipping lane to Europe from the Gulf and Asia beyond.
Last year the tiny country inaugurated three new ports and a train line to neighbouring Ethiopia. It also hosts China’s first foreign military base.