Djibouti Nationalizes All PDSA Shares in Doraleh Terminal
The Republic of Djibouti has decided to nationalize, with immediate effect, all the shares and corporate rights held by Port de Djibouti SA (PDSA) in the Doraleh Container Terminal (DCT) company.
As explained, the move was made to protect the fundamental interests of the nation and the legitimate interests of its partners, and to ensure that the situation of DP World-controlled DCT company, which is no longer in charge of the Doraleh container terminal since the contract termination, “aligns with reality”.
In February 2018, the Government of Djibouti terminated the concession for the Doraleh container terminal, granted in 2006 to DCT. The implementation of this concession contract was severely prejudicial to the fundamental interests of the Republic of Djibouti, to the development of the country and to the control of its most strategic infrastructure asset.
Taking into account the early termination of the concession contract, PDSA, which is the majority shareholder in DCT with 66,66%, terminated the shareholders agreement entered into with DP World in July 2018.
In early September, DP World informed that the High Court of England and Wales had granted an injunction restraining Djibouti’s port company PDSA from treating its joint venture agreement with DP World as terminated and prohibited PDSA from dismissing the directors of DCT.
The Republic of Djibouti said that the decision of the English Court “is merely a provisional measure which is neither final nor res judicata and is therefore not conclusive.”
As part of the move to nationalize the shares and corporate rights of PDSA in DCT, the representatives of the state in the governing bodies of the company will be appointed by decree. DP World will therefore have the State of Djibouti as a single interlocutor for all the discussions regarding the consequences of the concession contract termination.
PDSA, for its part, intends to assert its rights before the competent jurisdictions and will demonstrate that the decision to terminate the shareholders’ agreement taken before the nationalization of its shareholding was legitimate and justified in law and in fact, the Government of Djibouti explained.