Monday, June 18, 2018

Container Terminal Row Continues as Port and Logistics Outfit Makes Its Position Clear

UK Court Action to Settle African Investment Dispute
Shipping News Feature
DJIBOUTI – After the government seized control of the Doraleh Container Terminal within the Port of Djibouti from port and logistics group DP World in February, simultaneously kicking all the Dubai based company's staff out of the country in the process, rumours have been rife as to what happens next.

Certainly there will have been no love lost between DP and two of the world’s top ten container shipping lines, CMA CGM and Pacific International Lines (PIL) who, two months later, both jumped into bed with the government to offer assistance in running the facilities. Now DP World has been sufficiently incensed to scotch whispers that it is about to turn its back on the whole situation.

Of the various press reports speculating that the company may be considering an out of court settlement of the matter the company is unequivocal in its denials. A spokesman said that the concession agreement for the terminal remains in place, and the action taken by the Djiboutian government remains subject to legal process in the International court of Arbitration in London, concluding:

“We await the outcome of this process. We remain committed to operating Doraleh port as per original agreement of the concession, and we will not consider any other alternative settlement option.”

Certainly there is no basis to doubt DP World’s intention to see the business through to its natural conclusion. After 2014 when the Djibouti government announced it was rescinding the thirty year concession to run the box terminal and have some stake in future port development, DP won an arbitration case in London with accusations of corruption on its part dismissed as having no basis.

Djibouti is of course a keystone in freight distribution to and from that region of Africa, but has come under pressure of late with the Somaliland port of Berbera (in which DP World has a stake) selling off 19% equity to the government of Ethiopia, a move roundly condemned by both Somalia and Djibouti.