The Horn of Africa has been ordered by the London Court of International Arbitration to pay a sum of $385 million in compensation to UAE global ports operator, DP World over a breach of contract.
According to a statement, the London Court of International Arbitration ordered Djibouti to pay interest for unilaterally scrapping a 50-year concession contract with the state-owned DP World to manage and develop Doraleh Container Terminal (DCT). DCT.
Also, the ruling in favour of DP World gave the company the right to claim further possible damages if Djibouti proceeds with its plans to develop the container port with any other operator.
Reports stated that a major reason that sealed the fate of Djibouti in court, is its budding relations with China Merchants, a Hong Kong-based ports Operator to develop new port opportunities which further underlined the breach in exclusivity rights.
Currently, China Merchant’s Company hold a 23.5% stake in the facility. However, the court rule allowed for DP World to claim damages Djibouti presses on with its intention to develop her port with any other ports operator.
The terminal, a facility responsible for the dissemination of supplies throughout Djibouti and has been managed by the Middle Eastern ports operator since 2006 with the African Horn controlling a two-thirds stake was nationalised by the government in September after solely neutralising the agreement, claiming that it was already under the control of the global terminal operator.
DP World is a company owned by the government of Dubai in the UAE via a holding company. It was founded in 2005 after a merger between Dubai Ports Authority and Dubai Ports International. Its portfolio covers 40 countries and 6 continents with 77 operating marine and inland terminals supported by over 50 related businesses.
Apparently, the Dubai government still has more to settle with the Horn of Africa as, according to a statement they made, DP world is in another legal skirmish with Djibouti over a free trade zone in the same area.