DUBAI, UNITED ARAB EMIRATES - EQS - 14 September 2018 - DPWorld said today that it willcontinue to pursue all legal means to defend its rights as a shareholder andconcessionaire in Doraleh Container Terminal SA (DCT) in the face of Djibouti'sblatant disregard for the rule of law and respect for commercial contracts.
On 9 September the President of Djibouti enacted a decreewhich purportedly transferred the shareholding of Port de Djibouti SA (PDSA) inDoraleh Container Terminal SA (DCT) to the Government of Djibouti. PDSA is 23.5% owned by ChinaMerchants Port Holdings Company Ltd of Hong Kong ("China Merchants").
DP World said the transfer appears to have been made in an attempt to floutan injunction of the English High Court which restrains PDSA from using itsshareholding to take control of DCT. This is the latest step in the Governmentof Djibouti's five-year campaign to take the 2006Concession Agreement away from DCT, through which DP World operated, and partowns the Doraleh Container Terminal.
"Investors across the world must think twice aboutinvesting in Djibouti and reassess any agreements they may have with agovernment that has no respect for legal agreements and changes them at willwithout agreement or consent," a DP World spokesperson said.
On 31August, the High Court of England & Walesissued an injunction against PDSA, as shareholder in DCT, ordering that it:
- Shall not act as if the joint venture agreement with DP World has been terminated
- Shall not appoint new directors or remove DP World's nominated directors without its consent
- Shall not cause the DCT joint venture company to act on the "Reserved Matters" without DP World's consent.
- Shall not instruct or cause DCT to give instructions to Standard Chartered Bank in London to transfer funds to Djibouti.
In an apparent attempt to circumvent the injunction, on 9September 2018, the Government of Djibouti transferred PDSA's shares in DCT toitself. The new decree was accompanied by a press release replete with untruestatements. It also refers to DP World being paid fair compensation inaccordance with international law.
The 2006 Concession Agreement, which is governed by Englishlaw, provides that disputes relating to the Agreement are to be resolvedthrough binding arbitration in the London Court of International Arbitration.Such arbitration proceedings are ongoing. To date the Government has not madeany offer to compensate DP World.