DP World Will Continue Defending Its Rights in DCT
- Business & Finance
Dubai-based terminal operator DP World affirmed its plans to pursue all legal means to defend its rights as shareholder and concessionaire in Doraleh Container Terminal.
The company unveiled its intentions only days after the Republic of Djibouti decided to nationalize all the shares and corporate rights held by Port de Djibouti SA (PDSA) in the Doraleh terminal.
DP World referred to Djibouti’s move as a “blatant disregard for the rule of law and respect for commercial contracts,” adding that 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.
On September 9, the President of Djibouti enacted a decree which transferred the shareholding of PDSA in Doraleh Container Terminal to the Government of Djibouti. PDSA is 23.5% owned by China Merchants Port Holdings Company of Hong Kong.
“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 August 31, the High Court of England & Wales issued an injunction against PDSA, as shareholder in DCT, ordering that it should not treat the joint venture agreement with DP World as terminated.
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. DP World said that such arbitration proceedings are ongoing, adding that to date the Government has not made any offer to compensate DP World.