Radar | Apr 01,2024
DP World, already involved in a heated legal dispute with Djibouti, is suing China Merchants for building an international free zone on a Djibouti Container Terminal, where DP World claims a half century exclusive right for building terminals in Djibouti.
The 51-page legal brief by DP World was filed in Honk Kong requesting that the courts order the Chinese company to compensate DP World for damages it incurred as a result of the construction of the free zone along with interest. DP World, which operates over 78 ports across the world, has also requested the courts declare the agreement between China Merchants and Djibouti illegal.
The contract between DP World and Djibouti for the development of Djibouti Port was signed in 2000. In the agreement, Djibouti gave DP World exclusive rights over the port and free zone facilities, including container handling facilities, construction, development and terminal management.
Following this deal, the two parties signed another agreement in 2004 to develop Doraleh Container Terminal. DP World controls 33.3pc ownership, while Djibouti’s state-owned entity, Port of Djibouti (PDSA), holds a 66.6pc stake.
In 2013 China Merchants, a Chinese state-owned conglomerate based in Hong Kong and operating under the State-owned Assets Supervision & Administration Commission of the State Council, bought 23.5pc of PDSA from Djibouti. China developed and financed the free trade zone, considering Djibouti as an important part of its trillion dollar global investment initiative “Belt & Road”.
Meanwhile, DP World and the government of Djibouti became embroiled in a heated dispute last February. The controversy started when Djibouti annulled DP World’s concession at Djibouti Container Terminal. Djibouti unilaterally awarded the concession to the Singapore-based Pacific International Lines. This triggered DP World to take its case to a London-based arbitration tribunal.
The tribunal ruled in favour of DP World by declaring the concession agreement between the two as valid. However, Djibouti denounced the ruling stating that it was made without its presentation and saying it had not been summoned to legal proceedings. Djibouti also stated that the case was tried without any adversarial debate in the proceedings.
In return, two months ago the government of Djibouti nationalised the shares of the state-owned Port de Djibouti. The staff and assets at the terminal were transferred to Société de Gestion du Terminal de Doraleh (SGTD), a public company established to manage the infrastructure wholly-owned by the government of Djibouti.
DP World also took the case to another court, the High Court of England & Wales. Late last August, that court issued an injunction against the Port of Djibouti ordering it not to wrestle control of the terminal from DP World or act as if the joint venture agreement with the port operator has been terminated.
Last April, DP World issued a public notice warning companies that are considering building, managing or operating a Port in Djibouti of the validity of its concession claims at Doraleh Container Terminal in Djibouti.
The recent court action by DP World against China Merchants in Hong Kong follows this warning notice. In its charge, DP World claims that due to Djibouti’s breach of contract, it continues to lose revenues and profits from operations and management of the terminal and a chance to construct, develop, operate and manage the new ports.
It requested that the courts in Hong Kong declare China Merchants as unlawfully inducing the breach of clauses in the 2004 and 2006 concession agreement it holds in Djibouti and order it to pay damages to DP World along with interest.
PUBLISHED ON
Dec 12,2020 [ VOL
19 , NO
968]
Radar | Apr 01,2024
Agenda | Aug 07,2021
Fortune News | Apr 13,2019
Fortune News | Aug 14,2021
Fortune News | Apr 22,2022
Radar | May 08,2021
My Opinion | Dec 14,2019
Radar | Jul 02,2022
My Opinion | Jul 27,2019
Exclusive Interviews | Nov 23,2019
Aug 18 , 2024 . By AKSAH ITALO
Although predictable Yonas Zerihun's job in the ride-hailing service is not immune to...
Jul 13 , 2024 . By AKSAH ITALO
Investors who rely on tractors, trucks, and field vehicles for commuting, transportin...
Jul 13 , 2024 . By MUNIR SHEMSU
The cracks in Ethiopia's higher education system were laid bare during a synthesis re...
Jul 13 , 2024 . By AKSAH ITALO
Construction authorities have unveiled a price adjustment implementation manual for s...
Sep 8 , 2024
Prime Minister Abiy Ahmed's (PhD) visit to China last week could mark a watershed mom...
Sep 1 , 2024
Addis Abeba's skyline is being dramatically altered. Once characterised by unremarkab...
Aug 25 , 2024
It may appear distasteful, unappealing and cumbersome to sight. But, the Addis Abeba...
Aug 18 , 2024
The economy is in turmoil, and describing the situation as merely dire could be an un...
Loading your updates...