US court upholds $200 million award for DP World in Djibouti dispute

DP World has welcomed the decision by a US court to enforce a $200 million award against the Government of Djibouti, giving it yet another win in an ongoing legal battle over the illegal seizure of its concession to run a container terminal in the Red Sea country.

The Dubai-based port operator filed the proceedings in the US courts last year, seeking to enforce a third partial award issued by the London Court of International Arbitration (LCIA) over the concession for the Doraleh Container Terminal (DCT).

In a decision on Tuesday, the US District Court for the District of Columbia granted the unopposed petition to confirm the partial award issued in 2022. 

DCT was seized arbitrarily by the local authorities in February 2018 after they claimed the agreement they had signed, unfairly favoured DP World. Those claims were dismissed by judges and arbitrators both in the High Court in England, and before the LCIA.

Built and operated by DP World, the 1.2 million TEU terminal was 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.

It remains Djibouti’s largest source of revenue and the country’s single biggest employer, responsible for creating thousands of jobs – both direct and indirect – for the local community. Under DP World, it operated at a profit every year. 

A prolonged battle has ensued in courts in multiple jurisdictions, with every one finding in favour of DP World. Damages already awarded for lost dividends, breaches of exclusivity and management fees now amount to nearly $700 million.

In the event of a total expropriation, DP World’s claim will exceed a further billion US dollars. 

DP World has vowed never to stop its ongoing legal battle, until the return of its port concession in Djibouti or it receives full compensation for its lost investment. 

A spokesperson for DP World said: "The authorities in Djibouti have repeatedly shown an utter contempt for the rule of law and the norms of good business, with no respect for legal agreements. Their actions are a warning to investors across the world who should think twice about the safety of their existing business in Djibouti and the future value of any new investments. Put simply, the Djibouti government is bad for business." 

DP World has been in Africa for 20 years – investing in critical infrastructure to enable trade. In Sub-Saharan Africa, it employs more than 27,000 people across 48 countries.

. @DP_World welcomes the decision by a US court to enforce a $200 million award against the Government of Djibouti, giving it yet another win in its ongoing legal battle over the illegal seizure of its concession to run Doraleh Container Terminal.https://t.co/8LrdJ2t9RO pic.twitter.com/4j4qf0u4Vp

— Dubai Media Office (@DXBMediaOffice) July 31, 2024