Djibouti row: DP World sues China Merchants

dubai - Ports operator initiates action for building a free zone on a terminal being disputed with Djibouti government

Dubai-based global port operator DP World on Tuesday confirmed that it had filed a lawsuit against state-owned China Merchants in a Hong Kong court for building a free zone on a terminal being disputed with Djibouti government.

Filed in a High Court in Hong Kong, the lawsuit seeks damages, interest and declaration that China Merchants unlawfully procured and/or induced Djibouti's breaches of its agreement with DP World.

In February 2018, the Djibouti government had seized the Doraleh Container Terminal from DP World. The London Court of International Arbitration ruled in favour of DP World. The court had extended an injunction in September prohibiting Djibouti from interfering in the management of a port terminal seized from DP World.

The Dubai-based port operator is now suing the Chinese firm for its role in acquiring a 23.5 per cent stake in Djibouti's state-owned port authority. The Authority has been trying to evict DP World from operating the Doraleh Container Terminal.

The ports operator had said that its concession agreement for the Doraleh Container Terminal (DTC) remains in force, warning that the government's illegal seizure of the facility doesn't give the right to any third party to violate the terms of the concession agreement.

The spokesperson had earlier warned that DP World reserved the right to take all available legal actions, including claims for damages against any third parties that interfere or otherwise violate its contractual rights.

Managing a portfolio of 78 operating marine and inland terminal, DP World handled 53.6 million TEU (twenty-foot equivalent units) across its global portfolio of container terminals in the first nine months of 2018, with gross container volumes growing by 2.6 per cent year on year on a reported basis and 3.7 per cent on a like-for-like basis.

- waheedabbas@khaleejtimes.com