The US District Court for the District of Columbia has enforced a $200 million award won by a subsidiary of the UAE’s DP World against Djibouti, confirming a partial award issued in 2022 in a long-running arbitration over a port facility on the Red Sea.
The court’s decision, issued on Thursday, July 25, granted an unopposed petition to confirm the partial award. DP World was represented by Quinn Emanuel Urquhart & Sullivan, while Djibouti, which did not participate in the arbitration, was represented by Kramer Levin Naftalis & Frankel in Washington, D.C.
DP World initiated proceedings in the US courts last year to enforce the third partial award issued by Australian arbitrator Zachary Douglas KC. This award stemmed from a dispute over a concession to run a container terminal at the port of Doraleh, held by Doraleh Container Terminal (DCT), a joint venture between DP World and a Djibouti state entity.
Despite being a minority shareholder, DP World retained management rights. The dispute began in 2018 when Djibouti canceled the concession and seized control of the terminal, citing new legislation related to strategic infrastructure contracts. DP World and DCT responded by launching London Court of International Arbitration (LCIA) proceedings.
Douglas, in his first partial award, ruled that the concession was binding and Djibouti’s seizure of the port was illegal. In the second partial award issued in 2020, Douglas ordered Djibouti to restore the claimants’ rights within two months or face damages.
The third partial award, now confirmed by the US court, reiterated the validity of the concession agreement and found Djibouti liable for withholding dividends from DP World between February 2018 and December 2020, awarding $117 million in dividends and $31 million in management fees.
Damages beyond 2020 remain undetermined. Douglas also awarded DCT $35 million for Djibouti’s seizure of funds from a local bank account and ordered the state to pay $17 million in interest.
The concession has resulted in additional LCIA arbitrations, including a 2014 proceeding by Djibouti to rescind the agreement on corruption grounds.
