Djibouti ‘rejects’ UAE port legal action

DP World in Djibouti
Jebel Ali Port, managed by DP World in Dubai, United Arab Emirates, May 10, 2007

The United Arab Emirates (UAE) owned port company DP World is looking at its “options” following a legal ruling that sided in its favour over a row with Djibouti over control of the Doraleh port terminal, according to Garowe Online.

Djibouti seized the Doraleh Container Terminal from DP World in February, over an ongoing dispute which began in 2012 to “renegotiate terms” of control. DP World built and took ownership of the port operationally, and has a 33 per cent ownership stake, with the remaining 67 per cent held by Djibouti authorities.

Despite the port opening in 2009, the UAE says Djibouti pressured it to change the terms for control over the port. Djibouti even vied to buy out the UAE’s stake in March, according to Garowe Online.

Djibouti then stripped DP World of its stake forcefully under a domestic law issued in 2017 and backed it up with several other judicial decrees issued in 2018 leading to termination of contract.

But late last week, the UAE ran the issue by the London Court of International Arbitration (LCIA), holding that Djibouti was acting “unlawfully”.

Djibouti refused to attend the arbitration proceeding and claimed the original contract was “seriously prejudicial to the country’s development imperatives and to the control of its most strategic infrastructure”. The move to terminate the contract was “necessary and unavoidable [and] made in accordance with international public law,” it said.

Defiant

“We are not concerned by what the London Arbitral Tribunal has said, we have never lodged a complaint with this court and the judgement it has rendered does not concern us,” Aboubaker Omar Hadi, the chairman of Djibouti Ports and Free Zones, said.

“We are currently in talks with DP World, which has submitted a repayment plan for the interest they will earn for the remaining 20 years of the Doraleh port concession. We have the recordings of the minutes of our negotiations and we will go in that direction,” Hadi added.

The port is located in a strategic location of growing foreign policy interest for the UAE, allowing easy access to Yemen where it has been at war since March 2015. Adding to port interests in Socotra Island and access in the Bab El Mandeb a strategic waterway between Africa and Middle East.

Early this year, the federal government of Somalia hit back at the UAE and rejected DP World’s tripartite port deal with Ethiopia and Somaliland over Berbera port. Somalia claimed that the port regeneration project undermines its unity, sovereignty and constitution.