DP World wins latest judgement in Hong Kong Court over Djibouti concession

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DP World wins latest judgement in Hong Kong Court over Djibouti concession

12:31 CAT | 20 Sep 2022

FILE - Doraleh Container Terminal [File photo: The Maritime Executive]

DP World has been in litigation with China Merchants Port Holdings in Hong Kong since 2019 over the unlawful interference with its rights in Djibouti.

During this time, China Merchants has unsuccessfully sought to move the case to the courts of Djibouti.

Ruling means DP World can finally move to a full hearing on the merits against China Merchants before Hong Kong Courts.

DP World has won the latest in a string of court rulings, as it defends its rights as shareholder and concessionaire in Djibouti’s Doraleh Container Terminal.

The Court of Appeal of Hong Kong has dismissed the latest request by China Merchants Port Holdings seeking permission to file a second appeal before the Court of Final Appeal, against its previous decision that DP World’s suit against the company should be heard before Hong Kong Courts, and not the courts of Djibouti.

DP World and joint venture company Doraleh Container Terminal are bringing multi-billion dollar claims against China Merchants alleging that it induced 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 breach of DP World’s exclusivity rights, will also be examined.

China Merchants surprisingly argued that the case should be heard by the Djibouti courts, despite Hong Kong being its home jurisdiction. The High Court of Hong Kong agreed with DP World’s arguments 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 Hong Kong court ruling follows a ruling in January 2022, by the London Court of International Arbitration (LCIA) against the Republic of Djibouti, awarding interim damages of US$ 200 million for damages caused over the period between for the period 23 February 2018 to 31 December 2020. That was the eighth decision by an international court or tribunal in favour of DP World in its ongoing dispute with the Republic of Djibouti, and total damages due to DP World now amount to US$ 686.5 million, plus accruing interest, while the Concession itself remains legally in force.

The Doraleh Container Terminal is the largest employer and biggest source of revenue in Djibouti and has operated at a profit every year since it opened.

DP World is a leading provider of worldwide smart end-to-end supply chain logistics, enabling the flow of trade across the globe. With a portfolio of 295 businesses in 78 countries across six continents, with a significant presence in both high-growth and mature markets, the company enjoys strong relationships with governments around the world, working in partnership to strengthen economies through investment in infra-structure and the implementation of smart trade solutions.

DP World Doraleh (Djibouti) – facts at a glance

• Concession agreement signed in 2006.

• Shareholding structure: 66.66% government of Djibouti and 33.34% DP World.

• Quay length: 1,050 metres.

• Number of berths: 3.

• Annual capacity: 1.2 million TEU.

• Built and operated by DP World, Doraleh Container Terminal (DCT), is widely recognised as the most advanced container terminal on the east coast of Africa, enabling safe, smooth and efficient movement of cargo in and out of the country. The terminal is Djibouti’s single biggest employer and is responsible for creating thousands of jobs – both directly and indirectly – for people in the local community.

Background

• 2009: Official opening of Doraleh Container Terminal in the presence of The President of Djibouti Ismail Omar Guelleh, Sultan Ahmed bin Sulayem, Sheikh Ahmed Bin Mohammed bin Rashid Al Maktoum.

• The ceremony was attended by more than 400 local and foreign guests. President Guelleh’s statement on DP World and Dubai’s contribution to Djibouti’s growth: ”By constructing and inaugurating this terminal, the long-thought dream of the people of Djibouti has turned into a tangible reality thanks to support lent by Vice President and Prime Minister of the UAE and Ruler of Dubai H. H. Sheikh Mohammed bin Rashid Al Maktoum, for whom we harbour deep respect and gratitude.

• 2000: DP World and the Djibouti Government establish a joint venture with DP World awarded a concession to operate the Port of Djibouti.

• The partnership leads to the joint venture building the nearby Doraleh Container Terminal.

• Stimulates the economy, supports trade, creates jobs.

• Doraleh has capacity to handle 1.2 million TEU (twenty-foot equivalent container units) annually, the largest and most modern terminal in East Africa. Its 18 metre draft and 1050 metre quay handle the largest ships in service, including 10- 15,000 TEU “Super-Post-Panamax” vessels. Capacity at the terminal is set to grow in line with market demand to around 3m TEU over time.

• Djiboutian trainees contribute to operations at the company’s other African terminals, such as Dakar, Senegal.

• Following the official opening, DP World Chairman launches the newest wing of the Kempinksi Djibouti Palace Hotel, a Nakheel Hotels project.

• Djibouti President and Sheikh Ahmed Bin Mohammed Bin Rashid Al Maktoum open a 16 km road linking Djibouti with the new terminal, donated by Sheikh Mohammed and named after him. The USD 21 million road has four lanes in both directions.

DP World Contribution to Djibouti’s Economy

• As a foreign investor DP World has invested hundreds of millions of US dollars in the country and greatly added to the economy of Djibouti throughout the years.

• It has consistently contributed 12% to Djibouti GDP.

• It has grown origin and destination cargo by 380% in the last 14 years.

• It grew volumes over 70% in 2017 and was aiming for 80% in 2018.

Source: DP World / Media Release