DP World to Defend Djibouti Position After U.K. Court Ruling

Posted on Mar 3 2016 - 9:19am by ct2000
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Bloomberg business 3 March 2016

  • U.K. court rejects all charges against Djibouti businessman
  • Judge criticizes Djibouti government’s conduct in litigation

DP World said a U.K. court ruling that criticized Djibouti’s government and rejected charges against an opponent of the country’s president may help the company in arbitration proceedings brought by the Horn of Africa state.

The U.K. High Court in London ruled on Wednesday that Djibouti businessman Abdourahman Boreh didn’t take bribes or negotiate secret shareholdings over the construction and development of a port and freezone complex at Doraleh in the Horn of Africa nation. Djibouti’s government in 2014 rescinded DP World’s concession and began arbitration proceedings after it said it found evidence the Dubai-based company paid bribes and gave other financial incentives to Boreh while he was negotiating the concession.

“We remain disappointed that the government commenced these proceedings and its arbitration against DP World, which is based on essentially the same charges the court has now rejected,” the company said in a statement on its website. “We will now move forward in earnest to defend our position but we hope that is not necessary as a result of today’s judgment.”

Djibouti’s $1.5 billion economy relies on services related to its location on the Red Sea, one of the world’s busiest shipping lanes. The country serves as the only access to the sea for neighboring landlocked Ethiopia. DP World is one of the largest port operators with 70 terminals stretching from Sydney to Vancouver.

Government ‘Disappointed’

Djibouti’s government is “extremely disappointed” with Wednesday’s judgment and disagrees with its findings, according to an e-mailed statement.

“The Republic of Djibouti is exploring urgently with its lawyers the best course of action to take, including the possibility of an appeal,” it said.

Boreh spearheaded the development of the Doraleh port with DP World. Djibouti’s government accused him of a string of corruption claims, alleging he improperly benefited from the negotiations. Boreh claimed the allegations were a politically motivated smear campaign orchestrated by President Ismail Omar Guelleh to destroy his reputation.

Judge Julian Flaux criticized the country’s conduct in the litigation, dismissing all the claims against Boreh.

“The Republic was intent on pursuing a scattergun approach against Mr. Boreh of throwing as much mud as it could in the hope that something would stick, even though many of the matters were not ones in respect of which the Republic could have had a legitimate or sustainable claim,” he said.

‘Inadequate’ Testimony

Guelleh, 68, declined to testify in the trial, serving witness statements to the court that were “inadequate and simply fail to grapple with some of the most difficult issues in the case,” Flaux said.

All of the witnesses called by the government during the trial were former government ministers or high-ranking civil servants who were “in fear of the president” and weren’t prepared to say anything that contradicted Guelleh, Flaux said in his ruling.

Boreh, who was previously good friends with Guelleh, faced a campaign of political persecution after he declined to back the president’s proposal in 2007 to amend the constitution and enable himself to seek a third term in office in elections in 2011, Flaux said. Guelleh will seek a fourth mandate in a vote scheduled for April 8 after pledging in 2011 not to run again.

“If I could win against him as one individual, the people of Djibouti should also use the verdict to get rid of Guelleh in the elections next month,” Boreh said by phone from London. The Dubai-based businessman said he’s considering returning to Djibouti “within the next couple of years.”

Source: http://www.bloomberg.com/news/articles/2016-03-02/dp-world-says-djibouti-arbitration-based-on-rejected-charges

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