DP World wins another ruling in legal battle for Djibouti’s Doraleh Container Terminal

Latest ruling is eighth by an international court or a tribunal in favour of ports operator in continuing dispute

DP World and its joint venture company Doraleh Container Terminal have won the latest round of a multi-billion dollar battle. Photo: DP World
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DP World, one of the world’s largest ports operators, has won the latest court battle in a string of court rulings as it continues to defends its rights as shareholder and concessionaire of Djibouti’s Doraleh Container Terminal.

The Court of Appeal of Hong Kong has dismissed the latest request by China Merchants Port Holdings that sought permission to file a second appeal against the court’s previous decision, DP World said on Tuesday.

China Merchants had argued that its case should be heard by courts in Djibouti, despite Hong Kong being its home jurisdiction.

The High Court of Hong Kong agreed with DP World’s argument that the case should proceed in Hong Kong and ordered China Merchants to pay its legal costs.

“The Court of Appeal dismissed an appeal against that decision, and has now refused to grant China Merchants permission to file a second appeal before the Court of Final Appeal,” the company said.

The Dubai-based port operator and its joint venture company Doraleh Container Terminal are bringing multi-billion dollar claims against China Merchants, alleging that it persuaded the government of Djibouti to expel DP World from the country and hand over the Doraleh terminal to China Merchants.

China Merchants investments in other ports and free zone projects in Djibouti, in alleged breach of DP World’s exclusivity rights, will also be examined, DP World said.

The Hong Kong court decision follows a ruling in January 2022 by the London Court of International Arbitration against Djibouti, awarding interim damages of $200 million for damages caused during the period starting February 2018 through to the end of 2020.

DP World and Djibouti have been locked in a dispute over the concession to operate the Doraleh Container Terminal, which is located in the Horn of Africa along major trade routes in the Red Sea.

In 2018, Djibouti seized the terminal from state-owned DP World. The Doraleh terminal is the largest employer and biggest source of revenue in Djibouti and has operated at a profit every year since it opened.

The Latest Hong Kong decision is the eighth by an international court or a tribunal in favour of DP World in its dispute with Djibouti. Total damages due to DP World now amount to $686.5m, plus accruing interest, while the concession itself remains legally in force, the company said.

The government of Djibouti has yet to comply with these rulings and remains in breach of its international obligations, said DP World.

Despite its continuing legal battle with Djibouti, DP World is keen to expand its footprint in Africa, a major growth market for the ports operator.

The operator grew its presence significantly across the African continent in recent years with investments in seaports, terminals and logistics services as it seeks to tap into lucrative trade routes in the region. Its existing investments in Africa include projects in Egypt, Algeria, Rwanda, Somaliland, Mozambique and Senegal, according to the company's website.

In July, DP World announced plans to buy South Africa's Imperial Logistics for $890m, further strengthening its footprint on the world's second largest continent.

Updated: September 20, 2022, 10:18 AM