UK court upholds order in favour of DP World

dubai - This is in connection with the Djibouti port dispute

The High Court of England & Wales in London has upheld the injunction granted in favour of DP World in connection with the Djibouti port dispute.

The court sustained the first injunction made on August 31, 2018, prohibiting the Government of Djibouti's port company, Port de Djibouti S.A. (PDSA) from interfering with the management of the joint venture company, Doraleh Container Terminal S.A. (DCT), Dubai Media Office tweeted on Sunday.

"The court ruling means that neither the Government of Djibouti nor PDSA can control DCT or give valid instructions to third parties on behalf of DCT without DP World's consent," said the tweet.

Following a hearing on September 14, 2018, at which PDSA failed to appear despite being notified, the court ordered that the injunction would continue until it makes a further order or an award of the arbitration tribunal at the London Court of International Arbitration (LCIA) that will be formed imminently to consider the shareholding dispute with DP World.

On DP World's application, the court also extended the injunction to include any 'affiliate' of PDSA. Under the JV Agreement, PDSA's affiliates include the government. The decision follows the enactment of an "emergency" ordinance by the President of Djibouti on September 9. This ordinance purported to transfer PDSA's shares in DCT to the government of Djibouti.  

The court further ordered that PDSA must ensure that the joint venture agreement and articles of association legally bind any transferee of DCT shares in the same way as PDSA. The ruling means neither the government nor PDSA can control DCT or give valid instructions to third parties on behalf of DCT without DP World's consent.

A spokesperson of the Dubai-headquarterd DP World said: "This is yet another in a series of rulings - all in favour of DP World - that demonstrate Djibouti's continuing disregard for the rule of law."

"We underline our belief that companies intending to operate in such a country or already operating there need to seriously consider their dealings with this government in the face of such behaviour," said the spokesperson.

Recently, the London Court of International Arbitration Tribunal held that the 2006 Concession Agreement with DP World was valid notwithstanding the Government of Djibouti's attempts to terminate it through special legislation and decrees. DP World's claims for damages against the Government will now be determined in these proceedings.

DP World has insisted that it would continue to pursue all legal means to defend its rights in the ongoing dispute.

- issacjohn@khaleejtimes.com