London court rules Djibouti illegally seized DP World port; $1 billion dispute drags on

The long-running legal battle between global port operator DP World and the government of Djibouti has taken a fresh turn after the London Court of International Arbitration (LCIA) confirmed that Djibouti acted illegally in seizing the Doraleh Container Terminal (DCT) from the Dubai-based logistics giant in 2018.

- Issac John [e-mail]

The tribunal's final ruling reinforces that DP World's 50-year concession agreement for the port remains valid and binding, while the African nation still owes the company hundreds of millions of dollars in damages.

The LCIA ruling concludes one strand of arbitration involving Djibouti's state-owned Port de Djibouti SA (PDSA), but the dispute is far from over. The court said the 2018 seizure of DCT was unlawful, rejecting Djibouti's claim that it had the right to terminate the concession. However, it declined to award damages against PDSA, ruling that the harm was directly caused by the government rather than its corporate arm.

As a result, DP World's broader $1 billion claims against the Government of Djibouti and its Chinese partner, China Merchants Port Holdings, remain active.

The Doraleh Container Terminal, located on the Red Sea coast near one of the world's busiest shipping routes, was jointly developed by DP World and PDSA under a concession signed in 2006 to manage and operate the facility for 50 years.