31 July 2019
by SAID ABOUBAKER
DJIBOUTI, (CAJ News)– THE decision by the autocratic Djibouti’s government to influence local courts to nullify international rulings against it in the tussle with a Dubai ports management company is yet another blatant violation of international business laws and disregard of international court rulings.
The non-compliance to existing contracts by the administration of President Ismaïl Guelleh is also a deterrent to investments in the impoverished nation in the Horn of Africa.
This week, Djibouti approached its high court to rule the previous international adjudications as null and void.
“The move is proof of Djibouti’s complete disregard for recognized legal practice and respect for contracts calling into question any investment in the country both now and in the future,” the Government of Dubai’s Media Office stated.
Djibouti is under fire for cancelling Dubai-based DP World Group’s contract to run the Doraleh Container Terminal SA (DCT), which is one of Africa’s most strategic harbours.
The contract has been valid since 2006 but despite a 50-year operating lease, the port operation has been transferred to China Merchants Port Holdings, a controversial move that mirrors China’s growing influence in Africa.
The London Court for International Arbitration in London (LCIA) and the High Court of England and Wales have on five previous occasions ruled in favour of DP World and against Djibouti but the rulings have been ignored.
LCIA tribunal, in its most recent decision, in March ruled that Djibouti had by developing new container port opportunities with China Merchants, breached DCT’s rights under its 2006 Concession Agreement to develop a container terminal at Doraleh.
The Tribunal ordered Djibouti to pay DCT $385,7 million plus interest for breach of DCT’s exclusivity.
LCIA also ordered Djibouti to pay DCT $88 million for historic non-payment of royalties for container traffic not transferred to DCT once it became operational. Djibouti is also ordered to pay DCT’s legal costs.
The tribunal ruled the 2006 agreement remained valid and binding, as confirmed by another LCIA Tribunal and the English courts.
Litigation against China Merchants also continues before the Hong Kong courts.
In the binding arrangement, DCT is operator owned 33,34 percent by DP World Group. Port de Djibouti S.A., an entity of the Djiboutian government owns 66,66 percent.