The government of Djibouti has seized control of the Doraleh Container Terminal from Dubai Ports World (DP World).
DP World has operated the terminal since 2006, in accordance with a concession awarded by the government. DP World has described the seizure as "illegal" adding that it is "an oppressive and cynical" move in the government's campaign to force DP World to renegotiate the terms of the concession.
According to DP World, the terms of the concession were found to be "fair and reasonable" by a London Court of International Arbitration tribunal.
The government of Djibouti had demanded that the contract be renegotiated by February 21, 2018, before terminating the contract by presidential decree on February 22 and commencing the expropriation of all assets of the Doraleh Container Terminal.
"We consider the attempt of the government to enforce its terms, the purported termination and expropriation to be in breach of the government's obligations under its agreements with us, in force since 2004, and international law," said DP World.
"To protect our interests, we have been compelled to commence a new arbitration against the government, in London, seeking a declaration that the contracts are valid and binding on the government and to obtain urgent interim relief.
"We demand that the government will cease its unlawful conduct and continue to work as partners with us in the same spirit of cooperation that has been in place for the last 18 years, which has yielded hundreds of millions of dollars of direct and indirect benefits to Djibouti and enhanced its attractiveness as a leading investment destination in East Africa."
